Two large Swiss construction firms, Zschokke and Batigroup, have announced they will merge to form the country's largest builder. 650 jobs are expected to go.
The new group, with annual turnover of SFr2.7 billion ($2.1 billion), will be called Implenia.
In a joint statement released on Tuesday, the two companies said that Implenia would be the "incontestable number one" in Swiss construction, with a combined stock value of around SFr360 million and around 6,500 employees.
"The most important company in a very fragmented sector, Implenia will have on the national level around five per cent of the market," said the statement.
The companies, the two leading firms in the construction sector, said that the fusion would lead to a reduction in the workforce of "under ten per cent".
This would mostly come from natural attrition and would be spread over two years.
The Geneva-based Zschokke will have a 65-per-cent share in Implenia, with the Basel-based Batigroup owning 35 per cent. The new firm will have its headquarters in Zurich, with operational units in Geneva, Basel and Zurich.
The new entity expects cost savings of SFr45 million from the merger and annual synergies of SFr20 million at the operating level.
Implenia will concentrate on the development and management of new real estate projects, said the statement.
"For clients, this union will offer significant advantages thanks to strong links in all the country's regions, an accumulated knowledge and a larger skills base of qualified and experienced teams," it added.
The communiqué also stressed that the new group wants to play a more active role in the face of international competition both in Switzerland and abroad.
Reacting to the news, the country's largest trade union - Unia - said the fusion had been a "surprise operation" carried out in secrecy and for economic reasons.
Unia's Jacques Robert said he was concerned about the job losses. "We refuse to accept job cuts in construction because there is lots of work in Switzerland, maybe even too much," he said.
Meanwhile, the Master Builders Association said that there were too many construction companies in Switzerland and it expected further changes in the sector.
It added that the fusion would allow the new group to more effectively compete against foreign firms.
Under the terms of the deal, Zschokke shareholders would receive 40 Implenia shares for each share they hold and Batigroup owners would receive one Implenia share per Batigroup share they possess.
Shareholders will have a chance to vote on the deal at shareholders meetings in March next year.
swissinfo with agencies
Sales: SFr908 million.
Profit: SFr8.5 million.
Sales: SFr1.5 billion.
Profit: SFr21.3 million.
The fusion of Zschokke and Batigroup will create Switzerland's biggest builder, with 5% market share and annual sales of SFr2.7 billion.
But around 10% of the workforce will lose their jobs.
Zschokke will have a 65% share in Implenia, with 35% belonging to Batigroup.