(Reuters) – (This story has been refilled to correct typographical error in first paragraph)

Deutsche Bank AG’s merger talks with Commerzbank AG have put its 10,000 U.S. workers on edge, three employees told Reuters, with some concerned a deal could pressure Deutsche to further shrink or even dispose of its U.S. businesses.

The future of the bank’s U.S. trading and investment banking presence had already been in question, with some shareholders calling for further cuts on top of ones announced last year, and speculation has intensified following confirmation of the merger talks on Sunday.

The German government, which has a 15 percent stake in Commerzbank, is expected to retain a stake in the combined business if a deal materializes. Some employees fear that could pressure the bank to focus on its home market.

Both banks have cautioned that the outcome of the talks remains uncertain, and the process could drag on for months. In the meantime key employees could decamp to rival Wall Street banks and hedge funds, further weakening a business that has underperformed for years. Several executives have left the bank’s U.S. operations in recent months.

“We don’t know what’s going on. Everything is up in the air,” said one senior employee within the bank’s U.S. equity sales business, who asked not to be named because of the sensitivity of the matter.

Chief Executive Christian Sewing reiterated in a memo to staff on Sunday that Deutsche aimed to remain a “global bank with a strong capital markets business,” and a source familiar with the matter said the merger would not change the bank’s commitment to a strong U.S. presence.

Deutsche Bank declined to comment on Wednesday.

German finance minister Olaf Scholz, reportedly a proponent of the merger, has previously stressed the need for Germany’s banking sector to support German companies who want to go abroad to export.

After the 2007-2009 financial crisis, Deutsche maintained a large presence on Wall Street, even as European rivals like Credit Suisse Group AG made big cuts to U.S. investment banking operations.

Deutsche Bank’s U.S. business has brought in around half of revenue for its overall investment banking unit, which includes corporate and investment banking as well as trading, even though it came with a relatively high cost of capital.

However, encumbered by litigation and regulatory investigations into past misconduct, the business has struggled to compete with Wall Street rivals.

Deutsche had said last May that it would reduce its global headcount to well below 90,000 from 97,000. That included a 25 percent cut in equities sales and trading jobs, a significant number of which were in New York, where it has lagged rivals.

Cutting more jobs in the United States would not provoke the same political pushback that the two banks would face if they axe jobs in Germany, banking analysts say.

PAY CONCERNS

Even if Deutsche Bank keeps its U.S. operations largely intact following a Commerzbank deal, some staff fear pay and bonuses would decline because the combined entity would face a backlash from German taxpayers if its remuneration was seen as excessive.

Commerzbank, which is focussed on personal and commercial lending, typically pays its staff less than Deutsche Bank. If the German government were to retain a stake in a combined entity, lawmakers would likely argue that it should keep a tight rein on pay.

Traders at Deutsche Bank’s U.S. equities business have already felt a squeeze, with some receiving substantially smaller bonuses for 2018, the sources said.

That has contributed to a decline in morale, which has been exacerbated by the departure of senior staff including Brad Kurtzman, co-head of equities trading in the Americas, who is leaving at the end of this month, the sources said.

A recent focus on recruiting college graduates, held up by senior management as an affirmation of the bank’s long-term commitment to the trading division, has done little to quell concern, they added.

One employee, who asked not to be named, said further defections are considered likely as staff look to pre-empt further cuts should the Commerzbank deal go through.