Lehman (LEH) To Drop 6% Of Work Force, Not Enough

Lehman (LEH) will lay off about 6% of its work force according to The New York Times. That is about 1,500 people, but it is not nearly enough.

Earlier in the day an analyst from Fox-Pitt Kelton said that Lehman would be one of three firms which would "together write-down $6.1 billion on their "problem assets" across leveraged loans, and commercial and residential mortgages." The other two companies are Goldman Sachs (GS) and Morgan Stanley (MS).

If a large portion of these write-downs comes at Lehman and its money management arm Neuberger Berman has not been sold, the brokerage will need to bring in more money, even if the deal has to be done below market. There is no sign among the company’s investors or comment in the analyst community that says Lehman’s troubles are going to end soon.

Lehman will have to do much more than let go a small portion of its staff. It needs to raise $5 billion quickly.

Douglas A. McIntyre