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There's a PE firm based out of Austin called Vista Equity Partners that does this. Recently they purchased a tech company and moved their headquarters from San
by Nicholas_C 11y ago
There's a PE firm based out of Austin called Vista Equity Partners that does this. Recently they purchased a tech company and moved their headquarters from San Diego to downtown Dallas. This is probably a great way (for the PE firm) to get high salary employees to quit and hire employees at the lower Dallas salary rates. Also probably a stealthy way for them to shed headcount without layoffs and without running the risk of ruining the culture and having the black mark of layoffs.
- hwstar 11y agoPE firms kill companies over the long term by sucking all of the value out, then spitting out the (much smaller) shell of a company. When a company becomes controlled by PE, cost-cutting is the number 1 priority. Layoffs happen, the company slow-pays its suppliers and is constantly on credit hold, pay gets cut, benefits are cut, schedules become completely unrealistic, and misconceived products are launched which fail. I've seen this all happen in the last company I worked for. if you working for a company and it gets bought by PE, leave ASAP.
- rokhayakebe 11y agoPerhaps that is their goal: "Buy it, get 30% return on it, let it die. BUT if the people there somehow manage to revamp it, sell it."
- hwstar 11y agoNo doubt. There's a term for this: Harvest mode. I worked at a company pre-ipo all the way to the point where they were almost ready to turn off the lights. This was a 25 year timespan. In hindsight it was a mistake. I should have left when the PE guys took control.