Lehman to wield the axe again

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The Independent Online

Lehman Brothers is thought to be the next investment bank that will unveil job cuts as the fallout from the credit crisis continues to hit workers in the Square Mile.

Cuts are likely to be made across the board, with investment bankers at the group said to be "bracing themselves for the worst" very soon.

The job losses will come on the back of an earlier cull in March when it was revealed that Lehman was planning to dismiss 5 per cent of its global workforce. The bulk of the 1,425 job cuts are thought to have been borne by the group's domestic operations in North America.

A spokesman said he was unable to comment on the likelihood of new job losses.

The news of further cuts at Lehman Brothers comes days after rival American bank Morgan Stanley began a series of cuts in London that will see as many as 350 staff lose their jobs. No official announcement accompanied the axing of the 350 Canary Wharf positions, with the speed of the cuts believed to have come as a total shock to staff. Morgan Stanley had culled as many as 3,000 jobs since October, before the latest round.

Swiss bank UBS has revealed plans to slash more than 5,000 across its global workforce, following disastrous write-offs linked to the sub-prime disaster.

Citigroup chief executive Vikram Pandit, who has served nearly one year in the top role, has detailed plans to slash more than £30bn from its cost base, with hundreds of staff at the firm's Docklands headquarters thought likely to be made redundant.

Job cuts at Bear Stearns, bought by rival JP Morgan after becoming the highest-profile victim of the credit crunch, are set to reach around 10,000 globally.

Last month, analysts at JP Morgan predicted that as many as 40,000 jobs would be lost in London as the credit crunch worsens this year. The group's Amsterdam-based property analyst, Harm Meijer, made the prediction, saying that a previous estimate made by the Centre for Economics and Business Research of 19,200 redundancies was "too optimistic".

A spokesman for the group has since distanced the bank from the forecast, claiming it was taken out of context.

Meanwhile, an international investigation announced last month into the manipulation of Lehman Brothers' share price is "progressing well", City sources have told The Independent on Sunday. The probe, which is being led by America's Federal Reserve, aided by the Financial Services Authority, has also looked at possible abuses linked to the share price of Allied Irish Bank. However, sources say attentions are "now very firmly focused on Lehman".

Details on the investigation are expected to be released in the summer.

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