Lehman Brothers Holdings Inc. (LEH), which has been subject to ongoing speculation regarding its future and direction since the fall of Bear Stearns & Cos. earlier this year, is planning to cut another 1,500 from its staff before it releases third quarter earnings in mid-September. According to the New York Times, which first reported on the story and cited an unnamed source at the firm, the cuts would amount to roughly 6 percent of existing staff. Bloomberg News reported that the layoffs under consideration would be slightly less, at 1,000 employees affected. Bloomberg's source suggested that the cuts would not be announced until Q3 earnings are released on Sept. 15. Lehman has already laid off roughly 6,000 workers since June 2007, when the credit crisis really began to hit Street firms; most existing layoffs have been in primary and secondary mortgage operations, although it's not clear where the latest rounds of cuts would hit. Lehman was the leading underwriter of mortgage-backed securities last year. Not surprisingly, the firm has been the subject of the most mortgage-led speculation given to any company not named Fannie Mae (FNM) or Freddie Mac (FRE) these days. A team of analysts at JP Morgan estimated a week ago that Lehman could face up to $4 billion in write downs when it reports Q3 earnings. Lehman absorbed $2.4 billion in write-downs to its residential mortgage-related positions in Q2; the firm reduced its residential mortgage exposure from $31.8 billion to $24.9 billion during the quarter. MBS and ABS assets remain dominant on Lehman’s overall book, as well, valued at $72.5 billion of the company's $248.7 billion in total assets at the end of May; the second-largest asset category is the firm's corporate debt, by comparison, which represents $50 billion. Bloomberg reported earlier this week that Lehman is looking to establish a new company, funded by itself and outsiders, that will purchase much of the company's bad mortgage debt currently weighing on the balance sheet. That entity is rumored to be focusing on commercial mortgage assets, sources told the news outlet; among potential buyers is BlackRock Inc. (BLK), the largest publicly-traded U.S. money manager. When this story was published, Lehman press representatives had not commented on rumors of pending layoffs or on Lehman's alleged plans to set up an asset management vehicle to sell assets into. Disclosure: The author was long FRE and held no other relevant positions when this story was published; indirect holdings may exist via mutual fund investments, as well. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.