Bear Stearns employees worried about jobs

March 18, 2008 7:52:49 AM PDT
The government offered assurance on Monday that no other major financial institutions are close to collapse. However, Bear Stearns, whose stock was selling for more than $60 dollars just last week, is now trading around $4 dollars, it was sold for less than the value of its New York skyscraper headquarters.

Those 14,000 employees of Bear Stearns are trying to figure out what all this means to them. In their Manhattan headquarters, workers were seen carting off boxes of personal belongings in anticipation of the expected layoffs. One employee in San Francisco, who did not want to identified, said he expected a third or more of the 14,000 workers will be out of a job.

The revolving door at Bear Stearns' Manhattan headquarters is still moving, but now the firm is spinning into the hands of another investment bank JP Morgan Chase.

"They got us for nothing at all," said a Bear Stearns employee.

Employees were stunned that their firm had been sold for the bargain basement price of a little more than $2 dollars a share, which is a far cry from more than $170 dollars, just two years ago.

Bear Stearns has one of its largest offices in San Francisco here on the 41st floor of the Citicorp Center, in the heart of the Financial District.

"Any of you guys work for Bear Stearns?" asked ABC7's Vic Lee.
"We can't talk about it," an employee.
"You can't talk?" asked ABC7's Vic Lee.

Most of the employees ABC7's Vic Lee met said they had been told not to speak to reporters. Those who had no qualms, thought the company was worth far more.

"We all thought there was $80 dollars plus book value and now it's surprising that the takeout price had to be so low," said Bear Stearns broker Bob Shutzer in reference to the $2 dollars per share.

That's bad news for the 14,000 employees, who own nearly a third of the company. They'll be getting a fraction of what their shares were worth.

"Well, it's very unnerving, very upsetting. That's all you can say; great institution. To see what happened is just very upsetting," said Shutzer.

Last week, as word of Bear Stearns' financial troubles continued to spread, its customers and investors began leaving in a mass exodus.

"As you know, in the financial industry when you get a lack of confidence, you can get a run on. It's like getting a run on a bank and that's exactly what happened. You had a run on Bear Stearns and they had to seek help," said Shutzer.

No layoffs have been announced, but analysts expect they will be significant. The big question on the minds of the employees, when will it happen?

"Have absolutely no idea. Not a clue. I mean that's up to them," said Shutzer, referring to JP Morgan Chase, his new employer.

One employee told us privately that the copier in the office was a popular item today. A lot of people sending out resumes. As you can imagine, a lot of anxiety on the 41st floor the Citicorp Center.