Lehman layoffs, the tip of the iceberg

With thousands of Lehman workers preparing to pack their bags, experts say other Wall Street firms probably aren't done with layoffs either.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Jessica Dickler, CNNMoney.com staff writer

Has the Wall Street shakeup affected your confidence in the financial markets?
  • Yes
  • No
  • Not sure

NEW YORK (CNNMoney.com) -- Lehman Brothers employees face the bleakest employment conditions in recent Wall Street history, and experts say there will likely be more painful financial sector job losses to come.

Lehman Brothers (LEH, Fortune 500) announced it would file for Chapter 11 bankruptcy protection after all rescue plans fell through and many employees at the 158-year old investment bank went to their offices Monday morning and began to pack up their desks.

"Most people are assuming that they're out of a job at Lehman Brothers," said David Schwartz, head of executive search firm DN Schwartz & Co in New York. Schwartz said he wouldn't be surprised if upwards of 20,000 Lehman workers lose their jobs. That would amount to more than 75% of the company's total workforce.

At the same time, a merger between Bank of America (BAC, Fortune 500) and Merrill Lynch (MER, Fortune 500) will also "inevitably result in more layoffs," said John Challenger, chief executive of global outplacement firm Challenger, Gray & Christmas, adding to the tens of thousands of layoffs that have already occurred this year on Wall Street.

When Bear Stearns was acquired by JPMorgan Chase (JPM, Fortune 500) earlier this year, about 9,000 workers, or more than half of Bear Stearns' employees, lost their jobs - many of whom are still looking for full-time employment.

"Unfortunately, we've not seen the end of the layoffs on Wall Street and I think it's going to get worse before it gets better," Schwartz said.

Other experts also said the worst is yet to come. Between now and the end of the year, "the Wall Street layoffs are going to be enormous," said Paul Bernard, a veteran executive coach and career management adviser who runs his own firm.

Unlike past downturns, this will not just be a period of cutbacks, Bernard said. Rather, "the [financial] industry is going to be shrinking and shrinking rapidly." And that means that there will be economic repercussions felt throughout the city of New York and the country, he said.

Through August, financial firms have already eliminated an estimated 65,400 jobs over the past year, according to the latest employment figures from the Department of Labor.

But the pain has been particularly acute on Wall Street. Investment banks and brokerages there have shed about 9,300 jobs, or roughly 5% of their workforce, according to August's figures from the New York State Department of Labor.

"It's like a game of musical chairs with too many people chasing the jobs that are left," Challenger said. To top of page

They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.