Lehman Brothers, Merrill Lynch employees anxious about future
Workers at the two major investment banks are mired in uncertainty after the weekend's shake-ups.
NEW YORK -- Gloom and uncertainty fell over Wall Street today as the staffs of two major investment banks tried to absorb the twin blows that hit the U.S. financial sector over the weekend.
The news that Lehman Brothers Holdings Inc. had declared bankruptcy and that Merrill Lynch & Co. was being bought by Bank of America was received by employees with a mixture of shock, anxiety and grim resignation.
Outside Lehman Brothers' midtown headquarters on Seventh Avenue, stone-faced employees exited the glass tower during the lunch hour, confronted by a phalanx of television cameras on both sides of the street. Most hurried past without speaking, snarling when approached.
"Oh, it's unbelievably wonderful, a great day," one man in a gray suit and blue silk tie barked at a reporter as he crossed the street, a Blackberry pressed to his ear.
Others were more philosophical.
"I guess if I'm going to be in this business, I better get used to this business, the highs and the lows," said one twentysomething Lehman employee who works in technology, who would only give his name as Rafe. "Today is really a low, I guess, for sure."
Employees said they had not received any official word about layoffs but were bracing for the worst.
"Nobody knows what's going to happen," said Rafe, dressed in a starched blue Oxford shirt and gray slacks.
"I've never been a soldier," he added. "And I've always wondered what it would be like. Now I feel a little bit like one -- a soldier in the financial world."
In a nearby cafe, an older Lehman broker buying a sandwich balked when asked how today's events compared with Black Monday in 1987, when the Dow Jones industrial average posted its largest one-day drop in history, percentage wise. That day, Oct. 19, 1987, the index fell 508 points, almost a quarter of its value.
"It's one thing to lose your shirt," he said. "It's another to lose your job."
While Lehman employees prepared themselves to be out of work, stunned Merrill Lynch staffers spent the day trying to decipher the implications of the sudden sale of their firm.
"It's chaos here," said one broker who declined to be named. "People are just flabbergasted."
Merrill Lynch Chief Executive John Thain addressed the sales force at 11 a.m., but the broker said he was too busy talking to frantic clients to attend the meeting.
"I don't know how John Thain could even think anyone could listen to what he's saying, because the phones are ringing off the hooks," he said.
The prospect of being owned by a commercial bank triggered gallows humor internally. Some employees joked darkly that those who don't make enough money under the new regime will become Bank of America tellers.
It remains unclear how many Merrill Lynch employees will lose their jobs once the sale to Bank of America is complete. But that was cold comfort for many at the investment bank as they watched yet more upheaval roil Wall Street. Some fretted that the financial crisis will worsen.
"What's going on is nothing compared to what could happen if they don't bring some kind of realism here," the broker said. "This thing could become a terrible, terrible catastrophe."
geraldine.baum@latimes.com
matea.gold@latimes.com
