For the last two weeks we’ve been hearing rumors of layoffs at Lehman. Last week people at Lehman were saying that layoffs were expected to come this week, before the Labor Day holiday. Now Bloomberg is reporting that “people familiar with the matter” estimate that Lehman will cut as many as 1,000 jobs. The good news is that Bloomberg’s sources say the Lehmanites will hold on to their jobs for a little longer, at least until Lehman announces its third-quarter financial results.

Why would Lehman hold off? We’re told that Lehman is afraid of sending out signals about the size of its losses ahead of the third-quarter financials. The idea is that if the layoffs cut deeper than expected, investors may assume that they reflect bigger than expected losses. Better to announce the news all at once.

Update: The New York Times says 1500 employees, or nearly 6 percent of its work force, will get the axe before the third-quarter results are in.

Lehman Said to Be Poised to Eliminate as Many as 1,000 Jobs [Bloomberg]

Even as Wall Street’s storied investment houses struggle to get back on their feet, cost-cutting and layoffs may be hurting their ability to recover quickly from financial turmoil. Many of the best and the brightest have already seen the writing on the wall and lit out for brighter territory, while those left behind may be so demoralized they are underperforming while awaiting another round of expected layoffs.

In a story in the City section of the Times on Sunday (you might have missed it because that section doesn’t get delivered to the Hamptons, where you have to read the Long Island news instead), former UBS mortgage analyst Andrew Slutsky explains the problem. “People were like, ‘Why bother working if I know I’m getting laid off?’” Slutzky says. “You remember senior week of high school? You don’t really do anything. You just kind of hang out. We’d reminisce about the boom days.”

Reminiscing is not a trading strategy, and Andrew is not the first person from whom we’ve heard this description. If Wall Street’s boom times are dominated by men acting on “animal spirits,” these days (to paraphrase Bruce Springsteen), many Wall Streeters have ended up like a dog that’s been beat too much.

Things are so bad that many aren’t sure whether it’s worse to keep a job or lose one. “The funny thing about getting laid off, having worked in this doom-and-gloom environment for the past couple of years, is that you don’t know who the winners and the losers are,” Andrew says.

(As an aside: Thanks for shout-out, man. Drop us a line if you want to write more about your life after the layoff.)

Wall Street Blues [New York Times]

No one on Wall Street believes the official economic data anymore. Jobless number, spending numbers and job creation numbers are consistently revised in ways that show economic reality to be more gruesome than the original numbers showed. Inflation seems to be calculated according a formula that nets out anything with higher prices.

And now comes the new that from the U.S. Bureau of Labor Statistics that total headcount on Wall Street was flat over the past 12 months. That will be shocking news to the thousands of Wall Street workers who saw their jobs cut over the past year. Even data from private-sector analysts seems to undercount the bloodletting, showing that, on a seasonally adjusted basis, employment has declined by only 800 since the end of 2007.

So what happened to all those job losses? The answer after the jump, along with the real numbers.

Bloomberg sums up the total job losses from recent rounds of layoffs. The report comes with bad news and worse news. The bad news is that the job cuts add up to 3.3 percent of employees at 28 firms. The worse news: more are on the way.

That’s significantly less than the market slump from 2000 to 2003, when 17 percent of banking and securities jobs in New York were wiped out, data from the Bureau of Labor Statistics show. Given the record-breaking losses of the past year — banks and brokers have taken $383 billion of writedowns and credit losses — some economic forecasters and industry veterans expect the number of dismissals to increase.

We’re told that layoffs began yesterday in the structured leverage finance group at JP Morgan. Yesterday heads rolled among the senior staff. Today junior people are feeling the axe-man’s blade, according to a source familiar with the matter.

From the files of the “maybe we never should’ve gotten into this in the first place” department: the RMBS group at the S&P has supposedly informed the would-be incoming Associate MBA class that their services are no longer required. Additionally, a “bunch” of research assistants, “some” MDs and one director have been downgraded from “career watch negative” to “dismissed.”

CEO John Mack has reportedly been given the boot.

Another round of layoffs at UBS is underway today, according to a person familiar with the situation. The asset management and wealth management units are said to be on the chopping block. Investment banking is also expecting cuts.

Oddly enough, the municipal bond unit, which is reportedly set to be shuttered by UBS, has been asked to “hold on” as the bank attempts to see if there are any buyers for the business, according to our source.

UBS could not immediately be reached for comment on the job cuts.

It’s a story that’s now all too familiar. A young Wall Street hopeful begins a promising career only to find that its been cut short by a sinking economy and Wall Street losses. Here’s how Jeffrey Martz begins telling his story to the readers of the New York Times business section.

On Monday, Nov. 5, the New York press reported that a prestigious Wall Street house — that happened to be my employer — intended to lay off two-thirds of its investment banking staff of about 120. Since I was one of the last people to arrive and because big corporations tend to handle their personnel by the last-in-first-out method, it occurred to me that I would be smart to stand near the elevator. This prediction turned out to be accurate and on Wednesday, Nov. 7, my successful, but truncated Wall Street career of 61 days — including three working Sundays — came to an end.

Martz explains how he was fired by the head of the financial strategies group, who refused to look him in the eye until they shook hands for the final farewell. And from that moment on he saw not one of his supervisors nor any the folks who had recruited him to the firm, except for one accidental encounter as he packed up his belongings.

Martz, however, was fired not on Wednesday, November 7, 2007. He was fired on Wednesday, November 7, 1990. We found the story deep in the archives of the New York Times business section. It’s somewhat heartening to remember that we’ve been through all this before. What would be even more encouraging would be if we could find out what ever happened to the then-young Martz. But after extensive investigation, we haven’t found the guy. Anyone know where Martz is?*

*We’re hoping he Googles himself frequently enough to find out that his story is once again being told. Hey, Martz, get in touch. tips@dealbreaker.com.

My 61-Day Career on Wall Street [New York Times]

Speaking of blind men, Governor Patterson’s budget office doesn’t think things on Wall Street will be that bad, at least compared to Mayor Bloomberg’s budget office.* Budgeteers in Albany and City Hall are both warning of fiscal calamity but Bloomberg’s are far gloomier than Patterson’s, the New York Sun reports.
City officials are far more focused on Wall Street than state officials, in part because Wall Street accounts for far larger percentage of city revenues than state revenues.

A key difference, [city officials] said, was the city’s assumption of a decline this year in Wall Street bonuses per employee, and also its anticipation of a greater number of Wall Street layoffs. The mayor’s office is anticipating that Wall Street will shed 25,000 jobs over the next two years, causing wages to fall more steeply.

Our reaction to this news was: only 25,000? That number seems far too low. A recent study from the New York state Department of Labor puts the possible job cuts on Wall Street at 36,000 employees, which is around one fifth of its entire work force. That 20% figure is also what the Wall Street Journal reported Wall Street executives were predicting in March.

In short, even the pessimists sound a bit too optimistic.

City, State Gap Emerges on Pessimism [New York Sun]

* Editor note: Yesterday a cyclone joke. Today a crack about the blindness of blind men. We’re definitely going to Hell for this.

It seems my background check, part of my new-hire process, has pulled up some flags. My postings here on DealBreaker will, therefore, not appear in my name. Whoever that woman in the back office is, she won’t add my name to the system until the little issue with the FBI is resolved, so in the meantime I’ll just have to make do with this somewhat crippled account.

The great binge-purge cycle of investment bank human resources has drawn, it seems, into its second half. (Maybe we laid off completed a headcount reduction in our IT group this week and no one told me). Be that as it may, I happened across a recent victim of the vomitous expulsion of bankers onto the porcelain sidewalks of Wall Street, and took some time to interrogateinterview the poor soul.

10:49:58 AM equityprivate: I’ve always been curious about this big bank layoffs and the process. How did you find out? Was it a “pink slip” literally or what?

10:51:27 AM FormerBBEmployee: They call you into a private area, away from where you normally work, and explain what’s happened. As for the pink slip, not at all. It’s a packet of information that details what you get for being canned.

10:52:26 AM equityprivate: A packet? Like the reverse of a “New Hire” packet? What’s in it?

10:53:08 AM FormerBBEmployee: Actually, it is similar to a new hire packet. It goes into what money they owe you, benefits, contacts in H.R. … Of course, there is no mention of anything being “at will” …

10:53:44 AM equityprivate: So, there is a… what… printout of what the bank thinks it owes you?

10:54:26 AM FormerBBEmployee: Even better. A legal document they want you to sign. It says what you get, what you get if you sign, and what you were getting.

10:54:49 AM equityprivate: That’s insidious.

(See the rest after the jump)

Goldman Sachs, which announced this morning that it made $1.5 billion last quarter, has quietly been telling some employees to prepare for another round of layoffs. The job cuts are scheduled for mid-April, and will include some senior positions which have not been large cash generators, according to a person familiar with the matter. Goldman, which has weathered the storm of the credit crunch better than many competitors, has not had anywhere near the level of job cuts that rival firms, such as Lehman Brothers, have had.

Goldman Sachs was not asked to confirm this report.

Goldman Sachs Asset Management recently fired about twenty people from two teams managing Global Alpha and Global Equity Opportunities and, according to Charlton Heston, the victims were the analysts who “do all the actual work,” as opposed to names slightly higher on the roster who, beyond being involved in poor day-to-day decision making, do jack and cost a ton to employ. If you want to be all cynical you could chalk the canning methodology up to the groups (and GS at large and, you know, the entire Street) being boys clubs whose members have each others’ backs and who won’t let their brohamsters get fired for petty little things like shitty performances, and I guess if you’re looking at it like that, then, yeah, it seems kind of bad. But that’s because you’re looking at it all wrong— these firings actually cast GSAM in a positive light, because they underscore the division’s commitment, above all, and at all times, to lose as much money as possible. Getting rid of co-head Peter Kraus the other day doesn’t really seem in line with the aformentioned bottom line, so tut tut there, but we cross our fingers that his replacement will be paid more for less competence. I don’t think we need to tell you who’s in total agreement on this one:

A friend o’ the fired fills us in:

“It’s more than just a hiring freeze - yesterday in IBD an MD, VP, and Associate were shown the door in Industrials and two Associates were canned in NR.”

Is Lehman Brothers cutting ten percent of its workforce investment banking staff, circa now? Could be. Also could not be, but we’re leaning more toward “could be” since firing people is de rigueur among the financial set at the moment. Sad, but at least shares of CROX are down 4.12%. Anyway, let us know what you hear.

A recently laid off BoA analyst received the following message from her former employer. I don’t know if this sort of thing is common practice, and it’s unclear whether or not the note was serious or just an attempt to crack a joke in the midst of a tough situation (self-deprecating humor about how crappy your bonus are is always good), but let us just say, well-played, Ken Lewis. Made us laugh.

Dear Employee of Bank of America:

Based on your annual earnings, you may be eligible to receive the Earned Income Tax Credit (EITC) from the federal government. The EITC is a refundable federal income tax credit for low income working individuals and families. The EITC has no effect on certain welfare benefits. In most cases, the EITC payments will not be used to determine eligibility for Medicaid, supplemental security income, food stamps, low income housing or most temporary assistance for needy families payments….

Bank of America Personnel Center

Our favorite Swiss bank lost a ton o’ money and now a few people are saying layoffs are on the way, two of whom are employees hoping a last second admission of boyhood crushes on Adolf will save their asses (it would help if they could get their hands on a copy of a little indie porno called “Hitler Sucks,” which actually casts the guy in a pretty flattering light). Another soldier in Marcel Rohner’s employ sees things differently, asking, “I don’t know if you’ve noticed but UBS really doesn’t fire anyone (‘cept Jews). I mean look at our losses and layoffs comped to ml, ms, etc.” Love the detached confidence, which should serve him well down at the unemployment office. Either way I think you should a. Keep us abreast of the situation and b. Check out this musical clip, which I think might help thing a little if not a lot.

A former Countrywide employee informs us that Capital Market layoffs began this morning, with a 30-35 percent reduction in CMBS and 10 percent on the RMBS sales/trading desk. Packages were predictably weak (approximately 3 months on average with bonus allocations from 2007 ranging from 40-60 percent of the prior year, plus one free pass to the Hollywood Tans of their choice), but surveyed to be “better than ML and CS” (and, one hopes, BoA). He didn’t make mention of the larger issues— specifically, being burdened with the task of finding a new employer who furnishes the office with tanning beds instead of desks, and generally, how it’ll feel to no longer bask in the reflected glow of the big guy, but we’ll check back in a few days, when the shock’s worn off, and reality’s set in. And by reality setting in, we mean the recognition that each and everyone one of them played a small part in the historic effort of rooking millions of homeowners and investors — but the spoonful of sugar is that many deserved it. Good luck with your conscience. And the melonoma.

We’ve gotten to the bottom of the rumors we were following up on this morning about the rumored layoffs at Goldman Sachs. It turns out our skepticism was justified. There have not been across the board cuts at Goldman, and certainly not the type of layoffs we’ve seen at places like Citigroup and Bank of America.

But people are weeping into their keyboards, and a spat of “this is my last day at the firm” emails have been flying through 85 Broad Street today. This is the result of Goldman’s recently completed annual review process in which the people who come out in the bottom 5% are given a stern talking to and often leave the firm. Those in the dead pool have just been given notice—thus the resulting heartbreak, tears, rage and strangely dispassionate emails.

We hear that Cowen & Company has quietly been making cuts to its investment banking units. Like many financials, shares of Cowen & Company have suffered tremendously in the past year. It is down 52% over the past 12 months, worse even than Bear Stearns. A source told DealBreaker that the investment bank had cut several bankers in their consumer division a few weeks ago. Further cuts have also been made in the healthcare group and bankers in the technology group have been quietly informed they should begin looking for new jobs, according to the source.

Cowen & Company could not immediately be reached for comment.

Important Update: Further news arrives on the folks let go from Cowen & Company. According to another source familiar with the matter, the people shown the exit were very junior people who were let go because they were not performing up to expectations.

Also, some readers have protested that this item implied a direct connection between the price of the stock and the layoffs. Perish the thought. We intended no such thing. But we did believe that readers would be interested in hearing how C&C’s stock was doing these days.