Lehman workers sit tight-and drink up

As they await word on their fate, some toil away while others drown their sorrows.

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by Mina Kimes, writer

At Lehman headquarters, many were working Friday afternoon while others headed for nearby watering holes.

NEW YORK (Fortune) -- In the giant glass box that holds Lehman Brothers headquarters, plenty of employees were still toiling away Friday afternoon as they waited to learn the firm's fate. Others, though, were heading across 50th Street for a not-so-happy hour.

"It's been incredibly busy," said Shannon Noecker, a bartender at Bobby Van's Steakhouse, which faces the Lehman building. According to Noecker, who said about 30% of her customers are Lehmanites, business booms when banks go down.

"After UBS and HSBC had mass layoffs, we were packed," she said. "Now it's going to get crazy because of Lehman - it's been busy all week, and the traders I know have been drinking a lot. The hard stuff."

Employees trickling out of the building into local lunch spots and a nearby park were mostly tight-lipped about the future of the firm, which is now up for sale after a management plan to shrink and reposition the bank failed to impress investors.

An older Lehman (LEH, Fortune 500) employee who declined to give his name or position, hurried away from the building, briefcase in hand. "The truth is, no one wants to talk about this right now," he said. "It's the same today as it's been over the past three days."

An employee who works in sales agreed. "We're all just sitting around and waiting until we find out who buys us."

She slung an oversized Lehman tote bag over her shoulder and shrugged. "We were hoping for something better, but now we're just sitting back and watching the weekend news."

If Lehman does get bought, it's likely that the new owner will lay off a large portion of the company's 26,000 employees. The business has allocated $6.4 billion towards paying staffers this year - more than double its current stock market value.

One investment-banking analyst spoke with confidence about his job security.

"In banking, we're pretty sure we're going to get bought - and if it's by Bank of America, they're going to value bankers highly," he said. "They've got C level bankers, and Lehman has A bankers."

Whether or not that boast is on target, Richard Bove, an analyst at Ladenburg Thalmann & Co., said on Friday that Bank of America (BAC, Fortune 500) is Lehman's most likely acquirer.

While younger employees will see their compensation and bonuses shrink even if they maintain their jobs, senior staffers, who receive as much as 60% of their compensation in stock, have lost massive sums of money as Lehman shares have tumbled.

The stock has fallen over 90% since the end of last year to just $4.22 a share, and employees have lost more than $12 billion on paper.

Some workers placed the blame for Lehman's downfall, which arose mainly because of the company's massive exposure to real estate, on CEO Richard Fuld. "Dick used to be a well-liked guy, but over the last year, he's become very unpopular," said the saleswoman.

The investment-banking analyst insisted that employees remain loyal to Fuld.

"Sure, we wish he had done what Jamie Dimon did," he said, and steered the firm away from exposure to subprime mortgages. "But he's in the office, working just like everyone else."

The analyst added that he'll be laboring into the night, hoping to impress his future bosses, whoever they are.

But many of his co-workers, he said, will be otherwise occupied: "Everyone's out drinking right now."  To top of page

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