Labour experts warn that 300,000 people could lose their jobs between 1999 and 2002 through increased mergers in the overcrowded banking and financial services sector.
The Geneva-based International Labour Organisation (ILO), in a report scheduled for publication tomorrow, painted a grim picture of "massive job losses" and "loss of talent" with "anxiety and stress" for those that remain.
It said that more mergers and acquisitions were inevitable due to increased competition and urged company chiefs to make sure their staff were better informed. Keeping employees in the dark only creates problems in the future, the ILO said.
The report commented: "Neglect of the human factors is a frequent cause of failure. Two-thirds of mergers and acquisitions fail to achieve their objectives despite the often massive job losses and organisational restructuring they entail. The human factor is taken into account in only five per cent of mergers and acquisitions in all sectors."
The ILO said that all countries with a developed financial services sector are vulnerable to consolidation, including Europe, the United States, Brazil, Japan and Australia.
It pointed out though that "stronger employment protection laws and traditions in both France and Germany have helped to contain sectoral job losses in both countries."
The report will now be studied by a special meeting of the ILO in Geneva, including ministers, trade unions and employers.
One of the report authors, Mr John Sendanyoye, said ways had to be found to reduce the social impact of such mergers: "Workers should be partners in this process.... Human resources managers are only brought in at the end. They should be integrated right from the beginning".
For the workforce that survives company restructuring, the report cites "reduced job security, increased workloads, anxiety and stress, all of which can impinge negatively on performance in an intensely competitive work climate."
The ILO said this was a particular problem for the growing number of mergers taking place between banking operations in different countries: "The difficulties of adequately blending cultural and other human factors are often underestimated.
AFP