A woman who gave up her stable, prestigious position as a managing director at HSBC to move to Lehman Brothers just one year before the investment bank would crumble … along with her savings.
A lawyer who now works at a start-up and misses the exciting atmosphere of the bank — but doesn’t miss having to wear a suit to work. You’ll find the general counsel in a T-shirt and sneakers these days.
An executive assistant who worked at the bank for a decade and has not been able to find another full-time job since. He bounces around from company to company as a contract worker, suspended in uncertainty.
Lehman Brothers’ failure in 2008 upended the lives of these and thousands of other former employees, and triggered a financial crisis so dark and huge people were questioning if American capitalismhad a future. The world’s fourth-largest investment bank, which had been around since 1850, had grown into one of the country’s main underwriters of the poisonous and predatory subprime mortgages. By Sept. 15, 2008, it went bankrupt with its more than $600 billion in assets. It remains the largest filing in the nation’s history.
Some 25,000 employees were left asking: Now what?
To try and answer that question, CNBC reached out to the company’s former workers. Here are a few of their stories.
Years at Lehman: 1998-2008
One Friday in March 2008, Jayson Berkshire, a former executive assistant at Lehman Brothers, was monitoring his boss’ emails when he spotted his name. “Who is going to tell Jayson?” his supervisor wrote. That’s how he learned that he was about to lose his job of 10 years. “There was a sense of betrayal,” Berkshire, now 48, said.
Berkshire had developed very close ties at the investment bank, where he spent more than 50 hours each week. He booked elaborate events, arranged people’s appointments and picked up their lunches. “I like taking care of people,” he said.
That weekend, he quietly cleaned out his files. On Monday, he was officially let go by a chief administrative officer and a person in human resources. “I don’t know that they spent more than 15 minutes with me,” Berkshire said. Another assistant came up to him, sobbing. “It was like she couldn’t speak,” he said. “She was so hurt and devastated that I was one of the people going.”
“There was a sense of betrayal.”
Depression engulfed him. “I was bed-bound and disoriented and dazed,” he said, about the months after his layoff. “I was no longer going to a set place, and it wasn’t my choice.”
He hasn’t been able to find a similar position since. While he earned $85,000 a year at Lehman Brothers a decade ago, he estimates that he makes around $70,000 a year now. Most of the work he does find is temporary. A year at this bank, a year at that one. Often, he’s told the job could develop into a full-time position, but it never does.
“I found the culture has really changed,” Berkshire said. “Having an assistant is becoming a rare thing.”
“Companies think they’re saving money by not giving assistants to their executives, and what they don’t understand is here’s someone who you’re paying a lot of money and they’re spending their time doing administrative tasks,” he said. “It’s penny-wise and pound-foolish.”
Years at Lehman: 2007-2008
On Sept. 15, 2008, Lisa Roitman, a managing director at Lehman Brothers, was enjoying herself at a block party with her family in Greenwich, Connecticut, when a neighbor who worked at Goldman Sachs approached her. “I heard you were filing today,” he said. She was blindsided.
Roitman had come over to the investment bank from HSBC just one year earlier. During the interviewing process at Lehman, she said she was convinced of the company’s health. She was hired to work on fund derivatives, and said she was paid around $1 million a year to do so. She converted all the employee stock she’d accumulated since the 1990s into Lehman shares.
Some troubling signs soon appeared. The mortgage traders who sat on the same floor as her were disappearing. “It was hard to tell if people were quitting or if people were being let go,” she said. “But it was fewer and fewer people.”
“If I could lose this job, what else could I lose?”
Then, she was rattled by the failure of another investment bank, Bear Stearns. “There are so many risk and credit controls within these institutions,” Roitman, now 50, said. “Unless someone is doing something wrong, how does something like that happen?”
The demise of the company cost her around $1 million in savings, she said.
She remembers thinking, “Now I have to start all over again.” Suddenly, she was worried about paying for her children’s college and if she’d have enough to retire. She had set her parents up with a Lehman fund manager, and they took a hit, too. She was insecure about the future and wondered, “If I could lose this job, what else could I lose?”
In the aftermath of the bankruptcy, she stayed on to finish out her clients’ deals. Since, she’s worked as a lawyer at a handful of smaller financial companies, where she says she makes half of what she made at Lehman. “I’ve never recovered,” she said.
Yet the financial loss, she said, was not the hardest one.
“What I lost was my identity,” she said. “Our business was done.”
Years at Lehman: 2004-2008
At one point in time, Charles Kwalwasser would have been happy to spend his entire career at Lehman Brothers.
When he was first hired as an intellectual property attorney at the investment bank in 2004, it was an exciting milestone. “I always thought of them as one of the big powerhouses,” Kwalwasser said.
He went on to build the bank’s patent portfolio. He never considered that his job could be in jeopardy. “Lehman was huge,” he said. “I don’t think anyone thought the company was going to go bankrupt.”
However, when it did, Kwalwasser lost around $200,000, he estimates, since his compensation was partially invested in Lehman stock.
“I don’t think companies invest in their people like they used to.”
The rest of his career has been marked by twists and turns.
First, he moved over to Barclay‘s, which bought Lehman’s core businesses after its bankruptcy. Then he moved on to a start-up of community-based inventions, but that also ultimately ended in bankruptcy. Now, he works as general counsel at another start-up called Bark, a dog products company.
He thinks about how different his working life has been from his father’s. As a child, Kwalwasser watched his dad spend his entire career at just two major institutions: the New York Stock Exchange and the Securities and Exchange Commission.
At only 41, he himself has already worked for five different employers and wouldn’t be surprised if that number doubles before he retires. “I don’t think companies invest in their people like they used to,” Kwalwasser said.
On the other hand, he said, employees have become more focused on themselves.
He hopes to one day return to a buried passion for real estate and architecture. And while his uniform at Lehman Brother’s was a suit and tie, nowadays he saunters into work dressed as he would be on a vacation.
“It’s not that important,” he said, wearing sneakers and a T-shirt stamped “Pizza.”
Years at Lehman: 2003-2008
When Lehman Brothers filed for bankruptcy, Renee Spero, an assistant vice president there, was 10 weeks pregnant.
That tumultuous weekend, she couldn’t peel her eyes away from the television screen. “I remember sitting at the end of my seat, watching the news,” Spero, 38, said. “I didn’t know; do I go somewhere on Monday?”
Spero had started at the investment bank five years earlier as a financial analyst and worked her way up to assistant vice president. She had met her husband at the company and she imagined spending her entire career at the bank. “I thought I’d retire there,” Spero said.
She moved over to Barclay’s very briefly after the investment bank failed, but found her job was redundant there. She tried to land a similar job at another bank, to no avail. The competition was intense, as many other people were thrown into unemployment and looking for work at the same time.
“The situation I had at Lehman Brothers no longer existed,” she said.
“I no longer have nearly the earning power I had then.”
The salaries being offered her would barely cover the cost of child care for her son and daughter.
She decided to stop looking for jobs at banks and now is a stay-at-home mother. However, she puts in a few hours a week at a local nursery school in New Jersey where they live. Her husband, meanwhile, still works in finance.
Now that she’s been out of the field for a decade, she questions how easy it would be to re-enter it.
Her life seems to have permanently changed course with the fall of Lehman. “I no longer have nearly the earning power I had then,” she said.
She went on: “I miss having the status of being someone full-time in finance in New York City. Sometimes I just want to wear a shirt that says: ‘I used to have a big job.'”
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