Lehman Brothers is poised to cut a further 1,200 jobs as the struggling Wall Street brokerage scrabbles to bolster its balance sheet by reducing costs and selling assets.

The redundancies, which are expected to be finalised and announced on or before the group reports its third quarter results in mid-September, would mark Lehman's fourth round of job cuts in the past 12 months.

The cuts would represent about 5 per cent of its remaining workforce and bring the total redundancies to about 6,400 since June last year.

Although the details have yet to be finalised, the job losses are expected to be felt across the operation, including in the City of London. Most of Lehman's recent job cuts have fallen in Lehman's mortgage-related businesses, but a greater portion of this round are expected to come in its investment banking and trading operation, as the group's efforts to cut costs spread further across the bank.

Lehman is widely seen as Wall Street's most vulnerable investment banks as mounting losses on mortgage-related investments, and the expectation of plenty more to come, has pushed the group's shares down by about three quarters this year.

It reported a $2.8 billion loss in its second quarter, compared to a $1.3 billion profit the year earlier.

Analysts forecast that the brokerage will announce a further group loss for its third quarter, amid expectations that it could be forced into a credit crunch-related writedown of as much as $4 billion for the period, which ends on August 31.

The job cuts are part of a broader drive by Lehman to boost its balance sheet by reducing costs and selling assets.

The group is seriously considering selling its asset management division, which includes Neuberger Berman, the fund management business. The private equity firms, Kohlberg, Kravis & Roberts and Bain Capital are seen as the favourites to acquire the unit, should a sale go ahead.

Lehman Brothers is also sounding out potential buyers for $40 billion worth of troubled commercial mortgages and property on its balance sheet.

Lehman's shares were down by $0.34, or 2.14 per cent, at $15.81 in mid-day New York trading, on continuing concerns about the group's outlook.

Lehman Brothers declined to comment on possible job cuts or asset sales.