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Massive job cuts expected at Lehman

Lehman Brothers has revealed that it will cut 850 jobs as a result of the sub-prime crisis.

The company revealed that it would make cuts across its entire global network and other investment banks are expected to make similar cuts in the near future.

The job losses at the New-York based bank come on the day the European Central Bank (ECB) and the US Federal Reserve pumped more cash into the credit markets.

The Fed injected $31.25 billion with the ECB putting in $56 billion as borrowing levels continue to rise.

According to Reuters, the Aurora A Loan Services Unit, which makes loans to people with good credit ratings, is where most of the job losses are thought to be aimed.

Speaking to Reuters, Brad Hintz, analyst at Stanford C. Bernstein in New York said: "An awful lot of value investors are sniffing around Lehman, but they want to wait until they are certain there won't be a catastrophe when earnings are announced".

Shares in the company fell one per cent on the New York Stock Exchange on Thursday. They have fallen 31 per cent so far this year.