The London Stock Exchange Group (LSE) and Deutsche Boerse, which agreed to merge recently, revealed on Wednesday (1 June) that once combined, it would lay off 1,250 employees. The same was revealed in the prospectus issued to shareholders of both the companies.

The prospectus said slashing these jobs, which constitute about 14% of the combined work force, was part of a cost saving initiative of the proposed £21bn (€27.06bn, $30.31bn) all-stock merger. These job cuts, however, will not be immediate. It will happen in a phased manner over a three-year period after the deal closes.

The prospectus further revealed that this redundancy move would help achieve annual savings of €450m (£349.26m, $504.10m), which is about 20% of the combined operating costs, by 2019. These savings are important as it would help in getting the shareholders and investors to vote in favour of the proposed merger. While LSE shareholders will vote on 4 July, investors at Deutsche Boerse investors are said to take a call by 12 July.

Both the companies said some of these cuts would be from "natural attrition and the elimination of vacant roles". A LSE spokesman further explained that the job cuts would be across Frankfurt, London and other international locations over the next three years and would primarily be in the technology divisions.

Currently, the LSE that owns Milan-based Boersa Italiana, Italy's main stock exchange, has more than 3,500 employees across the UK, North America, Italy, France and Sri Lanka. On the other hand, the Frankfurt-headquartered marketplace organiser for the trading of shares and other securities has more than 5,200 staff globally.

Apart from saving costs from job cuts, both the companies said they could earn about €160m in new revenue opportunities and from cross-selling and creating new products. This would result in the creation of 550 new jobs, they added.

The merger, which was agreed in March, will create the world's largest exchange group by income. It will also create growth opportunities in China, the rest of Asia and North America and will create a more powerful rival to leading US and Chinese companies operating in this space.