Lehman looking at cutting some 1,200 jobs: source

Lehman Brothers Holdings Inc is looking at cutting some 1,200 jobs in its latest round of cost cutting, a person familiar with the matter said, as weak financial markets spur layoffs across Wall Street.
The job cuts would amount to roughly 5% of the work force of the fourth-largest U.S. investment bank, which has already announced three other rounds of cuts totaling about 4,000 positions this year.
The precise number of staff to be laid off in this most recent round is still being determined, the person familiar with the matter said. Lehman declined to comment.
Wall Street firms are broadly reeling from the credit crunch and Lehman is no exception. It is looking for buyers for some $40 billion of commercial mortgages and property on its balance sheet.
Investors fear that write-downs of its commercial and residential mortgage assets could be large enough to dramatically reduce the company's net worth, which stood at about $26.3 billion at the end of May.
Over the next 10 days, Lehman may announce a series of steps to boost capital, cut costs and reduce bad assets, wrote Richard Bove, an analyst at Ladenburg Thalmann, in a note to clients. If Lehman does not take these steps, an outsider could buy and restructure the bank in a hostile takeover, he added.
Lehman's shares rose $1.09, or 7.4% to close at $15.87 on Thursday. Even with those gains, the company's shares trade at less than half their book value, even as many of its competitors trade at a premium.
Many of Lehman's strongest businesses, ranging from fixed income underwriting to advising on mergers, have been much weaker this year compared with last year.
Given the potentially large write-downs, some of Lehman's critics have charged the company is undercapitalized. The bank has raised roughly $12 billion of capital this year through common equity, preferred stock and convertible securities offerings.
Lehman is looking at raising additional capital by selling a stake in its asset management business, sources have said.
Lehman had about 26,200 employees at the end of May.