According to an expert on human resource, this is inevitable given the need for rationalisation.
“This sense of insecurity is very common especially in companies that are being acquired given the possibility that the acquirer is likely to engage in the proverbial ‘trimming of the fat’ exercise,” HR consultant Srithren Krishnan told FMT Business.
Axiata Group Bhd (Celcom) and Digi Telecommunications Sdn Bhd (Digi) announced yesterday that they have been given the green light by the Malaysian Communications and Multimedia Commission to proceed with their proposed merger, likely in the second half of the year.
Both Celcom and Digi’s parent companies — Axiata and Telenor respectively — will hold equal ownership of 33.1% each in the newly-merged company.
While Celcom had announced in April that it would retain all employees once the merger is completed, the fear of layoffs continue to linger.
Srithren said that in any merger, priority is usually given to the acquiring company (if it is a takeover).
“In a merger, two different work cultures will also come together. This could lead to a rise in attrition especially in the short-term,” he said.
However, he said, there could be instances when there is a provision in the M&A agreement that both companies will not retrench, transfer or downgrade employees or remove the perks that they are entitled to within the first year post-merger.
“In some cases, cross-cultural training sessions may be conducted to help ease the mind of workers. This would usually be done within the first three to six months after the merger,” he said.
Nonetheless, Srithren said, while the merged entity may introduce activities to help bring about a sense of job security, this did not mean that they would stop looking for “scapegoats” or conducting “fault-finding activities” by auditing the performance of some workers.
“This enables them to weed out those who are deemed undesirable,” he said.
The merger of the two telecommunications companies — currently the second and third largest in Malaysia — will see the emergence of a new service provider with an estimated 19 million subscribers and a combined annual revenue of RM12.4 billion.
It is also expected to have a combined pre-synergy equity value of close to RM50 billion, which will place it among the five largest companies listed on Bursa Malaysia in terms of market capitalisation.
The newly merged company is expected to become the largest mobile player in the industry, overtaking Maxis Bhd, which now has over 9.4 million revenue-generating subscribers.
The new company will continue to be listed on Bursa Malaysia, according to a statement on Digi’s website.