EXCLUSIVE: More job losses expected at Lehman Brothers
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Up to 75 more UK jobs are expected to be at risk of redundancy at Lehman Brothers as the crisis in the credit market worsens.
Simon Hinshelwood, chief executive officer at the group, which includes the brands Southern Pacific Mortgage Limited and Preferred Mortgages and an as yet to be announced direct to broker brand, told Mortgage Strategy Online today that the credit crunch was going to have more of an impact on the business than the group had originally anticipated.
At the beginning of September it was announced 150 redundancies were to be expected at the group.
But as global credit conditions have continued to deteriorate Lehman Brothers has been forced to revise its original estimate.
Now the group anticipates between 175 and 225 positions are at risk of redundancy.
Hinshelwood says: “When I announced we were going to resize on September 6 the sub-prime market looked like it was going to be off between 25% to 40%.
"However we are now in a situation where it looks like it's going to be off 50% if you look at the market estimates for sub-prime and we would agree with that.
“While I thought the impact would be 150 people, what I'm saying now is the impact is going to be between 175 and 225 people.
“These are unpleasant times and these are very very difficult decisions to make.
“What we said at the start of consultation process is that we are trying to get to a position where we get a reasonable understanding of what's going to happen in the market before we give final numbers.
“We're still not entirely in that position and I've said to my staff today that we hope to be in that position in the next two weeks.
“It's a slightly bigger impact than we expected but it's exactly the same thing.
"It's the same consultation process, the same groups of people that are impacted. People on the new business side or people whose departments revolve around new business.”
Not all areas of Lehman Brothers business are at risk though, specifically finance, servicing and special servicing and Hinshelwood is keen to stress that there will be opportunities in those areas for the right staff who find themselves under threat of redundancy at the moment.
Plans for the new yet to be named direct to broker lender remain broadly the same. Indeed, Lehman Brothers always intended to complete its new technology platform before it launched its new lender and that platform is still on schedule for next year
Hinshelwood adds: “The timetable has moved slightly in line with the timetable for the re-platformiing but the overall intent and strategy around having brands that operate in each of thhe key distribution channels is still the same.”
Despite the market showing some signs of recovery - Lehman's yesterday launched a £225m securitisation of Alliance & Leicester originated buy-to-let and self-cert prime mortgages - it's still to early to say when the market will return.
Hinshelwoood says: “There are early shoots of recovery but it's not enough - we're all nervous about getting too enthused as who knows what might happen.
“The are horrible times and not at all easy. It's difficult to make these decisions and difficult to know the exact time to make the call and what the size needs to be.”
