LSE/Deutsche Börse merger could mean major job cuts

The planned amalgam of London Stock Exchange and Deutsche Börse, which will create a €27 billion European trading entity, will likely produce job cuts totalling well over 1,000.

In a prospectus issued to shareholders, the LSE said cuts were necessary to achieve annual cost savings of €450 million within three years of the merger’s completion. It envisages cuts could total 1,250, around 15% of the merged body’s total staff.

Conversely, the prospectus suggests over 200 new roles could be created in short order once the merger is complete, as the new entity’s growth opportunities are “significant”, and the job losses would be mitigated, if not negated outright, in the medium-term. Currently, LSE employs over 3,500 people worldwide, Deutsche Börse around 5,200.

However, it also projects that a further €250 million in pre-tax savings will be achieved within five years of the merger’s completion.

A spokesman for the LSE said job losses would be divided evenly between the two firms, and implemented incrementally over three years. Technology staff are expected to be the most heavily impacted, although much of the reduction is expected to arise from retirements and willing departures.

Elsewhere in the document, LSE states neither party views the June 23 referendum on Britain’s membership of the EU as conditional on the merger’s achievement, and the new entity will be well positioned to serve customers irrespective of its outcome.

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