Barclays to cut 3,000 after Lehman deal

LONDON (Fortune) – Barclays PLC will cut about 3,000 jobs in the aftermath of its purchase of bankrupt Lehman Brothers’ North American investment banking and capital markets businesses, Fortune has learned. In September, the third-largest British bank acquired Lehman operations that include fixed income and equities sales, trading, and research and investment banking. About 10,000 employees worked in those groups at Lehman, which is now part of a unit known as Barclays Capital. Barclays (BCS) president Bob Diamond has been spending much of his time in New York overseeing the integration of the Lehman shop into his own investment banking and trading groups. He hopes to have the operation wrapped up by year’s end, including the elimination of the staff positions. Diamond confirmed the headcount reduction to Fortune. How many of the lost jobs would come from the old Lehman ranks and how many from Barclays could not immediately be determined. Most of the cuts are expected to come in areas where Lehman and Barclays Capital have a lot of overlap, such as fixed income, and in support functions like information technology. Total employment at Barclays Capital numbers 26,000. This year has been a brutal one for financial services workers, and it’s not expected to get any easier. Financial firms in the U.S. shed over 65,000 jobs in the first eight months of 2008. Lehman declared bankruptcy last month after efforts to sell off some or all of the firm to competitors including Barclays failed when U.S. officials refused to provide any financial assistance to would-be acquirers. When Lehman filed, the door opened for Barclays to swoop in and pick up businesses it wanted without having to take on the burden of Lehman’s troubled investment portfolio, which was filled with mortgage-backed securities and commercial real estate loans on which the company had already taken billions in writedowns, with no end in sight. Barclays paid $250 million for the banking and trading businesses. It also paid $1.5 billion for Lehman’s New York headquarters and two data centers in New Jersey. Analysts are divided over whether the Lehman acquisition is a stroke of genius or madness. Investment banking, after all, isn’t a brilliant business to be in these days. Barclays stock is down 50% since the deal, and like all British banks it has had to fight off rumors about its solvency. In the first six months of the year, Barclays took write-downs of $4.9 billion on assets exposed to credit markets. It has an additional $6.2 billion of losses to record, making Barclays Britain’s “least well-capitalized bank,” investment bank Dresdner Kleinwort said in a September 22 note to clients.

friend of mine already got sacked at Barclays’ NYC office.

"Financial firms in the U.S. shed over 65,000 jobs in the first eight months of 2008. " Dizzzzaaaa mn… i wonder how many of these workers are going to leave the finance industry permanently. in the LONG RUN is this less competition for jobs? or more competition since there are less finance jobs and more people to go around?

Tensions Mount At Barclehs John Carney | Oct 10, 08 9:22 AM Strife between longtime Barclays employees and Lehman Brothers employees is rising, according to a person familiar with the matter. Many Lehman employees already believe the market and the government has been unfair to their firm. In short, they’ve got a bit of a chip on their shoulder. But now the feeling they are being treated shabbily by the firm that acquired them is fueling further ill will. “Some Lehman employees have been forced to sit at desks without computers,” that familiar person said. Senior Barclays executives have been warning their underlings not to mistreat the Lehmanites but that’s done little to resolve the tension.

pimp, sid, goldenboy is your job safe? Then why did Barclay’s initially say that they will be keeping all the 10K employees - only to fire them after 1 month?

i got nice bonus coming my way