NEW YORK (Bloomberg) — Barclays Plc, the UK bank that bought parts of Lehman Brothers Holdings Inc.'s US businesses, may cut as many as 5,000 jobs at the bankrupt company, Wall Street recruiters said.

The estimate, based on the $2.5 billion Barclays set aside for potential severance and retention costs, would mean half the Lehman employees transferred to the London-based company may be let go. Barclays, which paid $1.7 billion for the business, said it will decide in three months who will be offered permanent positions.

"They've paid for the right to choose through the ranks who they really want," said Jo Bennett, a partner at executive search firm Battalia Winston International in New York. "They'll look at overlaps, decide whether they want to stay in all the businesses Lehman was in."

Lehman, with more than 20,000 employees worldwide, filed for bankruptcy protection last week after it failed to find a buyer for the entire firm. Banks and brokerages have reduced their ranks by 120,000 since July 2007, when the subprime market crashed and sparked more than $522 billion in writedowns and credit losses.

Barclays won approval from US bankruptcy court last weekend for its purchase of Lehman's US trading and investment- banking business. Barclays Capital, the securities arm, already had some 5,000 employees in the Americas region before the acquisition.

"We're evaluating where we do have overlap between Lehman and Barcap employees," said Rich Ricci, chief operating officer of Barclays's investment-banking division, who will be running the merged US businesses. "We'll try to identify the best one for the seat."

If half of the $2.5 billion Barclays set aside were used for severance, that could cover costs associated with cutting as many as 5,000 jobs or as few as 2,500, depending on the pay level of the people involved, according to estimates by Battalia Winston's Bennett and Jeanne Branthover, a managing director at Boyden Global Executive Search Ltd. in New York. Barclays hasn't said what portion of the $2.5 billion may be used for severance.

"They're at the beginning of figuring out who's better for each job," Branthover said.