Another 1200 jobs may be axed at struggling Lehman

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The bank, struggling to rebuild its balance sheet and improve profitability, has already eliminated 4000 positions this year.

Insiders say the precise number of staff to be laid off and their location is still being determined, although Lehman had no comment.
City job losses are mounting as the credit crunch continues to take its toll on the financial sector.

Merrill Lynch has frozen hiring until the end of the year, and has said it will not replace employees who leave or hire for positions that were previously budgeted for. JPMorgan Chase could cut as many as 4000 of its own employees worldwide to accommodate an intake from failed rival Bear Stearns.

Citigroup is set to slash about 6500 jobs in its investment banking division. Goldman Sachs has signalled deeper jobs cuts with plans to eliminate positions in its mortgage and investment banking divisions.

One report has put possible City job losses at 20,000 over the next three years, while those who stay in work can expect to see bonuses slashed.
The Centre for Economics and Business Research says there will be a 2008 bonus pool of £5.07 billion, down from the near-record £8.51 billion payout last year.

Lehman is looking for buyers for $40 billion (£21.84 billion) of commercial mortgages and property on its balance sheet.

Investors fear that writedowns of its commercial and residential mortgage assets could be large enough to reduce dramatically the company's net worth, which was about $26.3 billion at the end of May.

It is also talking to KKR and Bain Capital, potential buyers of its asset management business centred on Neuberger Berman. It oversees $277 billion in funds, and is valued by analysts at up to $13 billion. Lehman's shares are trading at less than half their book value.