As the country's fourth-largest investment bank unravels, the more than 20,000 employees of Lehman Brothers have to contend with uncertain job prospects, plummeting stock holdings and the resulting emotional distress.
John Ryding can empathize.
Ryding was the chief U.S. economist at Bear Stearns when that investment bank collapsed in March and was purchased at a fire-sale price by JPMorgan Chase.
"It's not a period of my life that I would want to wish upon anyone," Ryding said. As the JPMorgan deal came together – the firm eventually purchased Bear Stearns for $240 million – there was disbelief, anxiety and eventually anger among some Bear Stearns employees.
"I don't know how many phases of grief that there are," Ryding said. "I think most people went through all of those phases."
Part of the employees' grief, he said, came from the fact that the price that Bear Stearns was eventually sold for – about $10 a share – meant that employees saw the value of their own Bear Stearns investments largely evaporate.
"It destroyed the wealth that a lot of people had built up over the years," he said.
And Ryding said that employees were unnerved by a lack of guidance from senior management during the meltdown.
"When it came to handling morale, I think a lot of people felt they were left hanging," he said.
A person familiar with the situation at Lehman indicated that, last week, communication there wasn't any better.
"There's no information filtering from top management down even to the heads of trading desks, so they don't know much about what's happening," he said. "I'm sure they're looking at the TV screens like we are."
Like the employees at Bear Stearns, Lehman employees have a lot to lose with respect to their Lehman investments: At under $4, the stock is down more than 90 percent from its value one year ago.
Ben Silverman, the director of research at InsiderScore.com, a Princeton, N.J., service that tracks executive stock transactions, said that Lehman CEO Richard Fuld has seen the value of his Lehman stocks plummet more than $600 million since December.
But top executives aren't the only ones taking a hit.
"In a situation such as this, everybody -- big shareholders, small shareholders, executives, secretaries, janitors, whoever owns the stock -- is hurting right now," Silverman said.
Silverman said that the culture of Lehman encourages rank-and-file employees to own company stock. It does so for a reason, he said.
"By owning a stock, whether it's you buying it yourself or being awarded options, your interests are aligned with the company and your company's interest is aligned with you," he said.
In other words, he said, if employees know that their work could directly affect the value of their own investments, it could result in better employee performance.
Whether they're seeing their stock portfolios erode or their jobs in jeopardy, Lehman employees may face a host of emotional concerns, said Roy Lubit, a New York psychiatrist who works as an organizational consultant and an executive coach.
"I think there's going to be a lot of people who become very depressed and there's going to be some people who are overwhelmed by the depression," he said.