Do Mergers Mean Layoffs?

Updated: Nov 29, 2018

Not necessarily.

I have lived through six acquisitions in my two-decade career and my take on mergers is that they can open as more doors than you realize. And I don’t mean trap doors where you drop through the floor, slide down a chute and end up in the parking lot holding a pink slip.

First off, let’s admit there are very few pure mergers. There’s always somebody who has the upper hand or is about to gain it. I’ve seen the PBS Nature series. One company is the lion and the other one is the gazelle (a.k.a. dinner). Don’t fool yourself.

Start by remembering this is all very impersonal on the acquirer’s end. Before and during an acquisition, you are most likely a name on a spreadsheet, along with your job title and your compensation figure. No one has it in for you.

Are you well paid and at the high end of the salary range for your position? Maybe your salary sticks out as an anomaly for the job title. That might make you vulnerable.

The point of an acquisition is building long-term value. The acquirer saw potential value in your employer, and then went down to the bank (or a private equity firm), so they could write a check. If your company was a steal, there might be slightly less pressure to cut the majority of jobs. But if your employer was purchased at a premium, or a high-multiple of earnings, then the buyer has to be ruthless in order to keep their job.

Now, let’s look at your job title. Are you in a back office role, or are you in a customer-facing or product development role? You might actually be working every day in the sweet spot, the very reason your company was acquired. Or let’s say you are in sales or business development, developing a new high-margin territory, in an industry or country seen as valuable to your new employer. I’d say your chances are good you’ll hang on to your job, plus you potentially will have more corporate resources backing you.

One thing I will tell you is that an acquisition will stir the pot and break up the status quo. Your job will be safe, but maybe your boss is let go because of duplication in management. That could open some doors for you. Conversely, you will probably be seen as second-class compared to your new peers, even if your years of service have been bridged and honored by the new employer.

What I’d like you to understand is that not everyone loses their job (that would make no sense). And the people who have a high-likelihood of survival in the new era would be better served by not keeping their heads down. They should be volunteering for assignments and becoming more visible. You want to leap off that impersonal Spreadsheet and into your new reality with as much confidence as possible. You’re going to need it!

I’ve been thinking about this a lot. I even wrote a book about it. Take the assessment on this site. Let me know how things work out for you. And if you haven’t been acquired, know that someday it’s going to happen. I want you to be prepared to survive and navigate the new landscape like a pro. That’s my story.

photo credit: Mish Sukharev