ZURICH, Switzerland (AP) _ Union Bank of Switzerland and Swiss Bank Corp. reached a deal with unions Friday to try to cushion the impact of large job cuts resulting from the merger.

The UBS-SBC merger into the United Bank of Switzerland, creating the world's second largest bank, will cost an estimated 13,000 jobs worldwide. In Switzerland, about 1,800 layoffs are expected.

In a statement, the banks said the dismissals would be ``the most equitable ... possible.''

The plan worked out with the unions focuses on ways of limiting forced layoffs by encouraging early retirement for those over 55 and promoting more part-time work.

It also makes provisions to help people find new jobs or relocate work. Bank employees who are laid off without first finding alternative jobs will receive compensation depending on their age and years of work at the banks.

``We're happy with the deal. That's why we signed it,'' said Urs Tschumi, secretary of the Swiss Bank Staff Association.

However, a second union which represents bank workers, the Swiss Clerical Association, said it could not accept any deal which envisaged dismissals.

The Swiss government, which had been worried about any social and political fallout as a result of mass job losses, welcomed the agreement for relying on private initiative rather than state handouts.

The merger, announced late last year, is due to be put to shareholders for final approval next week.