Dec. 4 (Bloomberg) -- Nomura Holdings Inc. will cut as many as 1,000 jobs in London, about one-fifth of its local workforce, as costs from acquiring parts of Lehman Brothers Holdings Inc. set the brokerage on course for its biggest annual loss.

Japan’s largest securities firm will shed staff in front and back offices, including former Lehman employees and its own bankers, spokesman Tohru Namikawa said by phone today in Tokyo.

The global credit crisis that’s caused almost 200,000 job losses at financial firms worldwide is squeezing Nomura harder than Chief Executive Officer Kenichi Watanabe predicted. The brokerage, heading for a second straight full-year loss as it struggles to digest $2 billion in costs from acquiring Lehman, said as recently as Nov. 19 it had no plans to slash jobs.

“The job cuts cast a shadow over the Lehman integration process,” said Mitsushige Akino, who oversees about $468 million as chief fund manager at Tokyo-based Ichiyosh Investment Management Co. “Former Lehman bankers may now question guarantees from Nomura, and the cuts illustrate how severe the market is that Nomura faces.”

The company’s shares rose 1 yen to 619 yen at the 11 a.m. trading break in Tokyo. The stock has slumped 69 percent in 2008.

“The decision follows an internal review after the acquisition of Lehman Brothers’ equities and investment banking operations in October,” Tokyo-based Nomura said in a statement e- mailed to Bloomberg News.

Nomura agreed to take over Lehman’s operations outside the Americas after the Wall Street firm went bankrupt in September, and pledged to guarantee bonuses in an attempt to keep 8,000 former Lehman workers from joining rivals.

Losses Swell

Watanabe, 56, on Oct. 28 announced a wider-than-expected fiscal first-half loss of 149.5 billion yen ($1.6 billion), putting the company on course for a record full-year deficit.

He’s eliminating at least 30 positions in Tokyo, mainly among former Lehman employees, four people familiar with the matter said last month, declining to be identified because no public announcement had been made.

Watanabe said at a speech on Nov. 19 he wasn’t planning significant job cuts and was increasing staff in New York.

The Financial Times reported the plan to cut 1,000 London staff earlier, citing Nomura spokesman Paul Abrahams.

The reduction “will ensure that the company remains competitive in the current market conditions, and establishes the right cost base going forward,” Nomura’s Namikawa said.

Barclays Plc, the U.K. bank that bought units of Lehman in the U.S., began firing employees of the combined firms in October. Barclays President Robert Diamond was quoted by Fortune magazine the same month saying the company would shed about 3,000 employees in the U.S. after the Lehman purchase, which added more than 9,100 workers to its payroll of 5,000 in the region.

To contact the reporter on this story: Takahiko Hyuga at thyuga@bloomberg.net

Last Updated: December 3, 2008 22:28 EST