Mike Lawrie, the departing chief executive of Misys

Whenever significant deal like Misys’ potential merger with Swiss rival Temenos emerges employees within the firms understandably start getting a little nervous.

On the one hand the announcement talks of how Temenos’ focus on banking, wealth management and business intelligence software “complements” Misys’ expertise in core banking, treasury and capital markets IT, which is slightly reassuring. On the other, the terms “significant cost savings” and “operational synergies” will immediately elicit some sweaty palms in both organisations.

The combined entity will have some 7,500 employees. Should we therefore expect some redundancies because of the merger? Unfortunately the answer appears to be yes.

“The two firms clearly serve distinct demographics, so it’s likely that the sales forces in both organisations will be secure,” says Ralph Silva, an analyst at research firm SRN. “However, from a technical perspective Temenos has a very advanced solution, while Misys’ is a little more antiquated. I’d therefore expect their development team to be targeted for cuts.”

During 2011, Misys added 900 employees and 60% of these were in development and customer serves, which arguably means it’s currently overstaffed in this area. Silva suggests that this recruitment was Misys’ attempt to build a more sophisticated product infrastructure, and that this requirement will be negated by the Temenos deal.

Moreover, some analysts have already suggested that the move is a both a reflection of the tough market conditions and could lead to customers of both organisations departing. However, while both organisations already sell software to some 1,000 customers, they are largely smaller institutions. The new combined entity – worth $2bn by market capitalisation – could give them the scale to net some larger customers.

There could also be one positive on the recruitment front – if they start to migrate customers on to a single platform, developers could needed for integration work.

“Any hiring on this front is unlikely to emerge for at least six months after the deal,” says Silva.