Impact of the Financial Meltdown

Canary Wharf turned into a cardboard city as thousands clear their desks

By Mark Hughes and Jerome Taylor
The Independent, Tuesday, 16th September 2008

If employees of Lehman Brothers needed a reminder of their bank's demise yesterday, they only had to look skywards. On the building directly opposite the bank's London headquarters in Canary Wharf is a scrolling ticker with the latest FTSE 100 share index prices. Lehman Brothers had been erased from the list. In its place ran the headlines, "Wall Street rocked by Lehman failure" and "FTSE tumbles on Lehman failure".

It was a cruel reminder of the position in which the bank's 5,000 UK employees now find themselves. News of the bank's demise broke so late on Sunday night that many British staff only heard their jobs were on the line when they awoke.

Yesterday they turned up at work only to have their worst fears confirmed. Hundreds left the glass-fronted building carrying cardboard boxes full of personal belongings.

Many more stayed inside where an impromptu leaving party had been organised on the seventh floor. Staff drank beer and red wine and those with credit remaining on their canteen cards bought as much food as they could carry.

Others were more practical, using the time they had left to send their CVs to one-time rival firms. Last night none knew if they would be paid on Friday. Edouard d'Archimbaud, 24, from Paris, was particularly unlucky. Having been delayed on his way to London by the Channel Tunnel fire, he arrived in Canary Wharf yesterday for his first day of work at Lehman Brothers. He didn't even make it as far as his desk. M. d'Archimbaud, who was due to start a £45,000-a-year job as a trader, said: "I arrived but before I could even get to my desk I was told everybody is fired. I do not know what I will do now. I've taken out a six-month lease on a flat and I don't know how I will pay for it."

Marion Guilbert, 36, who is expecting twins, left the building in the afternoon after being told she had lost the sales job at the firm she had held for the past seven years. "It is very emotional," she said. "But even more emotional for a pregnant woman. But it's not the worst news I could have got. At least I've got something to look forward to."

Among the staff casualties were all 90 members of the graduate scheme. One, who asked to be named as Rob, admitted his situation was particularly precarious. At 24, he already has a wife and two children to support, as well as a mortgage to pay. "I do have some concerns," he said. "But I'm perhaps not as worried as some of my colleagues. In my graduate class some of the foreign guys were in the country on visas that were only valid if they had a job. After today's news they might have to go back home.

"In the offices today people were maintaining a stiff upper lip. We swapped email addresses so we could keep in contact. It has really taken everyone by surprise. We thought someone would save us; that there would be some kind of deal, but there was nothing."

It wasn't just the suited bankers that were hit by the bank's collapse. Addressing the world's media in a zebra-print Lycra vest, 35-year-old Sphinx Patterson, the company's freelance gym instructor, said he had turned up yesterday to take a fitness class, only to be told he no longer had a job at the firm where he had been worked for five years.

"Everybody has been affected, it is an avalanche effect," he said. "People are in tears. People are crying and there is a lot of emotion, a lot of shock and surprise. The girls are crying and the blokes are hugging each other."

However, those who don't ply their trade in the high-earning, bonus-driven bubble of investment banking were less than sympathetic. "It's a high-risk industry isn't it?" said one assistant who worked in a nearby office block. "Yes, they might lose their jobs every now and then but they make a lot of money in the meantime don't they?"

As many of the now-redundant work force headed for the Tube station or bars of Canary Wharf, the administrators that were called in just hours previously held a press conference inside one of the Lehman Brothers building's grand halls.

Despite the masses of staff announcing that they had been sacked, Tony Lomas, of PriceWaterhouseCoopers, said that only "a couple of dozen at most" had actually been dismissed. He added that the company's payroll was $75m (£42m) and admitted that members of staff were unlikely to be paid this month.

He said: "We started the day with no certainty that we would have cash available to make payment due at the end of this week. We still don't know what the position is. What we have undertaken to do is tell staff as soon as we possibly can whether there are funds available and whether it is appropriate that they should be paid."

Asked if he was surprised at the downfall of the company he is now in charge of winding down, Mr Lomas paused before saying: "I am. It seems amazing to me that a business as huge as this can fail in this way. It underlines the massive importance of market confidence because once that is gone, and no one wants to trade with you, you are in serious trouble and there is no way back."

*The trader
When Duo Ai, a 26-year-old trader from the US who had been transferred to London, woke up yesterday he read an email from his boss saying the company had filed for bankruptcy. "Everyone's been told that we no longer have a job," he said. "No one thought that Lehman would die; it's such a strong franchise. We really didn't see this coming. We thought some bank would buy Lehman."

*The new recruit
Edouard d'Archimbaud, 24, from Paris, arrived in Canary Wharf for his first day of work yesterday, but did not make it even as far as his desk. "I arrived but before I could even get to my desk I was told everybody is fired," he said. "I do not know what I will do now." He said it was his first job since leaving university and he would now try to find work in London.

*The financier
Trush Patel, a 25-year-old financier, had been told by the administrators that he should still turn up for work tomorrow. "Everyone has been in the canteen, using up the last of the credit on their canteen cards. You can see them all in the offices too, on the phones sending off their CVs. There'll be about 5,000 new people in the job market now so there'll be a lot of competition."

*The graduate
Jack Reynolds was on the graduate scheme and had only been at the company since last Monday. "My career has been screwed," he said. "Everyone is upset but they've just got to get on with it." Many of his friends were clutching Lehman-branded rugby balls and umbrellas as mementos. "We're off to the pub," said one. "There's no point sticking around here."

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