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Lehman Brothers captive chops 180 employees
By siliconindia
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Tuesday, 05 August 2008, 00:13 IST
Mumbai: In the captive back-office unit of Lehman Brothers in Mumbai, around one-fourth of its employees are on the verge of losing their jobs. The back office unit has asked 180 of 700 employees to leave on account of its $2.8 billion net loss in the second quarter.
Lehman Brothers, the global investment bank has reportedly announced a net loss of $2.8 billion due to bad debt. Part of the processing related to this bad debt was done in the Mumbai unit, according to Economic Times. There is also a possibility that the company will declare a portion of its assets for sale as it might face a loss of about $2.5-billion in Q3. This loss will definitely affect the Mumbai unit, says a report in the Economic Times.
Awdesh Krishna, senior vice-president and HR head of Lehman Brothers India has denied the report saying that no one has been sacked at the back-office unit. However, the company is going through a tough phase as it lost its senior executives like investment banking senior VP Charandeep Singh and mortgage capital senior VP Sameer Chadha to rivals earlier this year.
Financial institutions like banks have opted for outsourcing as a way to cut costs as the captives are getting costlier in terms of operations. Several financial companies are also planning to sell their captives.
