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Last ditch bid to salvage something from Lehman Brothers

PUBLISHED: 22:58 16 September 2008 | UPDATED: 13:37 05 October 2010

THOUSANDS of jobs at Lehman Brothers in East London could be saved, it has emerged tonight. The US investment bank which collapsed yesterday has been in talks with Barclays Bank to sell parts of the stricken business. Lehman’s bosses approached Barclays late Monday, asking if it wanted to buy its broker-dealer arm which was excluded from the bankruptcy protection

Mike Brooke

THOUSANDS of jobs at Lehman Brothers in East London could be saved, it has emerged tonight.

The US investment bank which collapsed yesterday has been in talks with Barclays Bank to sell parts of the stricken business.

Lehman’s put itself into bankruptcy protection in the US and administration in Britain on Monday after white knight’ talks with Bank of America and then Barclays for a full-scale takeover failed at the weekend.

But this was followed by Lehman’s bosses approaching Barclays again late yesterday, asking if it wanted to buy its broker-dealer arm which was excluded from the bankruptcy protection.

This part of the business deals in shares, currency and bonds, a large part of the trading at Lehman’s European HQ in Canary Wharf.

These businesses employed 10,000 out of Lehmans’ staff of 25,000 worldwide, many of them at Canary Wharf in London’s expanding Docklands business district.

But it is not yet clear whether Barclays’ talks include Canary Wharf, which employed 4,000 in investment banking.

Barclays is now looking to take over just a series of licences to trade, it is understood, and the people employed in the broker-dealer business.

Meanwhile, staff were clearing their desks yesterday in an unprecedented culling of jobs.

They began to emerge in shock shortly afterwards, not knowing whether they will be paid this month.

Headhunters set up makeshift recruitment offices in coffee shops in Canary Wharf as hundreds of jobless bankers and investment analysts began the search for work.

“The company has ceased to exist,” said one in vestment banker emerging from the building.

“Everyone is clearing out their stuff now—the whole company is closing.”

The collapse means everyone who was entitled to a bonus—some at least £1m—now get nothing.

The shock waves are now being felt through Canary Wharf, among business support services.

A dry cleaner’s which delivered and collected twice a week at Lehman’s has now lost its biggest customer.

Nearby cafes and bars are also about to feel the pinch, with their lunchtime and evening trade gone, which has depended on the banking staff.

A fitness instructor who ran a class at the bank saw distressed employees drowning their sorrows in the staff canteen, downing beer.

“People are walking around in shock,” he said. “Girls are crying, blokes hugging each other.”

His classes have been cancelled. It wasn’t just the high-fliers losing their jobs—small service businesses like his had lost a huge slice of their income.

One trader was actually fired before he began. Edouard d’Archimbaud, 24, was due to start his first day as a £45,000-a-year trader on Monday, having had trouble getting to Canary Wharf because of last week’s Channel Tunnel fire. He finally arrived at Canary Wharf, only to be told he had no job.

Some staff returned to the bank today—but were only being retained by the administrators to begin the sad task of winding up existing business dealings.

It was the end of Empire, what was once one of the western world’s biggest profit churning vessels—now dashed on the rocks by the credit crunch.

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Have you been hit by the collapse of Lehman Brothers? Have you lost your job? Or have you lost business in the service industry with the demise of your biggest customer?

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