New Delhi: It was the stuff of business school dreams: an offer from Lehman Brothers.
As investment banking became the career choice at elite institutes, the firm hired Indian Institute of Management graduates by the dozen, primarily to staff overseas, but also for its domestic arm which opened last year.
Hours after Lehman Brothers Holdings Inc. announced it would file for bankruptcy on Sunday, the bank’s Indian employees and observers expressed shock and uncertainty about what would come next.
One stunned IIM Bangalore alumnus working for Lehman Brothers in England dwelt on the speed of his employer’s collapse. “We’ve all been taken by surprise,” he says. “This process was done in just five days, and most of us are caught off guard.”
Employees came to work on Monday morning, after receiver PricewaterhouseCoopers took over the firm’s UK operations, he says, to see if there would be a next paycheque. A receiver is a firm that manages a company that has declared bankruptcy till the proceedings are complete.
For hires overseas, the news particularly stings as many depend on employment for their immigration status. No job, no visa.
But the state of limbo is truly global. “We still haven’t been told anything officially, so nobody knows what’s going to happen,” says a Lehman worker in Mumbai. “Frankly, we’re all sitting around monitoring Reuters.”
Indian business school officials say they have already started courting other employers to hedge the risk of hiring freezes in financial services, but didn’t have comment on Lehman.
On Pagalguy.com, an online community for the business school set, members worried about Lehman’s Indian operations and the summer internships the bank had already awarded for 2009.
According to one user from IMT Ghaziabad, Lehman recruiters had been on his campus as late as last week.
“It’s really shattering for all those who eyed this brand as their dream destination,” wrote one user. “Now, in just no time the story is reversed.”
Market sources say the Lehman India subsidiary might be able continue operations, but acknowledge it is an unlikely scenario. “As a measure of prudence,” says one person requesting anonymity, “Lehman India has stopped doing business.” “Some CVs are already out on the market.”
And search firm executives expect the number of bankers seeking private equity and venture capital jobs will keep going up. “We are receiving more calls than ever from investment bank professionals,” says Charul Madan, partner, Executive Access India Pvt. Ltd. “It’s not just candidates in India approaching us for jobs but also employees from i-banks in the US and the UK.”
Rajeshwari Sharma and Samanth Subramanian contributed to this story.