Lloyds has not yet put a figures on the job losses.
Lloyds has said that its acquisition of HBOS would save it at least £1.5bn ($2.4bn) a year, raising fears of heavy job losses from the merger.
Both banks have also unveiled further write-downs on assets ravaged by the credit crunch, with HBOS hardest hit.
The banks also detailed plans to raise up to £17bn as part of the government's bank bail-out plan.
Unions said that the banks should think about the human cost of the takeover and avoid compulsory redundancies.
Lloyds did not say how many jobs would be cut as a result of the merger, but said there was scope for "significant cost savings" from combining the branches and back offices of the two banks.
BBC business editor Robert Peston said the estimated £1.5bn in cost savings from the deal was 50% higher than expected, which could mean heavy job losses.
The savings are good news for holders of Lloyds TSB and HBOS shares, since it means bigger dividends in years to come, our correspondent said.
However it will be profoundly worrying for the 140,000 employees of the two banks, because it implies there could be job losses of perhaps 20,000, he added.
The Unite union said that the two banks needed to think about the human consequences of the merger.
"We believe that if this takeover is managed properly, with the full involvement of the union, compulsory redundancies can be avoided," said Unite joint general secretary, Derek Simpson.
"It is completely unacceptable for the banks to continue fuelling speculation while leaving their worried staff in the dark."
Both banks also said that the market turmoil had reduced their earnings.
Lloyds TSB said third quarter profits at its wholesale and international division had been hit by a £270m write-down on assets hit by global credit problems.
HBOS said write-downs and losses on bad debts for the first nine months of this year now stood at £5.2bn, up £2.7bn from the end of June.
Lloyds said it wants to raise £4.5bn from investors and HBOS is seeking £8.5bn. If the shares are not taken up, the government will acquire them.
The government will also directly buy preference shares in the two banks - worth a total of £4bn.
Under the terms of the government agreement, dividend payouts are restricted, directors' pay limited and banks are required to pay 12% a year interest on the shares.
Lloyds said it hopes to resume payment of dividends in 2009, when it aims to have bought back the preference shares from the government.
HBOS and Lloyds TSB both said that they were committed to the merger deal despite reports over the weekend that rival bids could emerge.
It also announced that the combined group would be named Lloyds Banking Group and confirmed that the company will have its Scottish headquarters at The Mound in Edinburgh, where it will also hold annual general meetings.
Since the government first brokered the deal to save HBOS six weeks ago, Lloyds TSB has twice renegotiated the terms of its takeover to reduce the amount of stock it will give HBOS shareholders.
HBOS shareholders will now get 0.605 Lloyds shares for every HBOS share, compared with an earlier offer of 0.833. Initially, there had been proposals for a one-for-one share swap.