Lehman Laying Off 5% of Workforce

Updated from 11:48 a.m. EDT

Lehman Brothers(LEH - Cramer's Take - Stockpickr) is eliminating 5% of its global workforce, TheStreet.com has confirmed.

The job cuts, which will come from all divisions and regions, reflect a continued challenging market environment, according to sources familiar with the situation. The news was first reported by CNBC.

According to an annual filing with the Securities and Exchange Commission, Lehman had approximately 28,600 employees as of Nov. 30, the end of its fiscal year.

The New York-based investment bank has eliminated more than 3,700 positions as it downsizes its residential mortgage lending business, which primarily focused on subprime and Alt-A mortgages. Other brokerage firms have also downsized their headcount, mostly within residential mortgage operations as well as the fixed-income businesses, in the wake of the credit crisis. Other major banks, including Citigroup (C - Cramer's Take - Stockpickr), Bank of America (BAC - Cramer's Take - Stockpickr)and Merrill Lynch (MER - Cramer's Take - Stockpickr), have recently announced major layoffs, as the industry has been hit hard with the subprime and credit crisis.

Lehman, along with Goldman Sachs(GS - Cramer's Take - Stockpickr), is expected to report first-quarter results on March 18. Morgan Stanley(MS - Cramer's Take - Stockpickr) and Bear Stearns(BSC - Cramer's Take - Stockpickr) will follow later in the week.

A Lehman spokeswoman declined to comment.

Shares of Lehman recently were falling 4.7% to $44.18.