TROUBLED South West Essex PCT has announced merger plans with NHS South East Essex as part of its plans to make savings.
NHS South West Essex wants to save £52m, which would include reducing staff to 2008 levels.
The merger is subject to ratification by both trusts later this month.
The selection process for a new chief, who would lead both trusts, will begin in the next few weeks.
Both trusts will, for the time being, remain as independent statutory bodies and keep their own board, a spokesman said.
The merger is in line with government proposals to transfer most primary care trust commissioning responsibilities to new GP consortia by 2013 and is not linked to the redundancy plan, the trusts said.
NHS South West Essex staff have also been advised that compulsory redundancy is likely to be necessary to reduce head count, a spokesman added.