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PE 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 con
by hwstar 11y ago
PE 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.