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Anatomy of a buy-out: Step 1. "We bought this company because we love the product, nothing is changing" -- At this point, smart employees (that have been here

Anatomy of a buy-out: Step 1. "We bought this company because we love the product, nothing is changing" -- At this point, smart employees (that have been here before) without retention bonuses are leaving Step 2. "We are going to combine some processes, to lower our costs" --There goes many of the backend people that actually knew the how/why of the system. Step 3. "Our customers love our support and development, and are willing to pay a bit more. We can cut back/outsource some development/support costs, to increase profit. Just a bit, to make our money back" -- At this point, if your retention bonus is fulfilled, you are gone Step 4. "This quarterly profit isn't high enough to meet analysts expectations. We are cutting 10% from every group's budgets" --at this point, the only people left are those that have no other options. Step 5. "We have problems in Engineering, Support, and operations. Lets outsource it, so we don't keep having to deal with all this turnover". Step 6. "Our sales are a fraction of their former level. Lets take this huge pile of cash we made, and buy another company. We love their product!"

alunchbox 5y ago
Rinse and repeat! Too many great products ruined in the pursuit of growth and greed.
hinkley 5y ago
There's an earlier Step 2 where they tell you that they aren't going to tell you how to manage your division, and then tell you that they won't pay for some of your initiatives. Because strangling an initiative by withdrawing all funding isn't saying 'no' I guess? I'll never understand how that works. Usually that squeeze happens in the second fiscal year, and in some cases the 'combine processes' step is characterized as a carrot instead of a stick.
calvinmorrison 5y ago
Depends. Plenty of companies growth model is through purchasing brands and combining "synergies". CHD is a great example. They acquire a compajy and its IP, but the factories and all and keep useful employees and buy everyone else out. Arm and Hammer, Trojan Condoms, Oxiclean, Toothpastes, toothbrushes, cat litter, everything in the grocery that's not food!
paranoidrobot 5y ago
A company that I worked for got acquired by a vastly larger company, who is in turn owned by an even larger company. When it was announced we were being acquired, one of the first questions was "What are the retention bonuses". "We don't plan to have any retention bonuses" is the answer that came back from the new owners. A few months later I'm talking to a VP of something-or-other in the acquiring organisation who's commenting "Yes, we've noticed you're having a lot of people departing. Company X who we acquired a few years ago had the same thing, we're not sure why". This was while being told "nothing will change for you", to be immediately followed by "We're getting rid of X and Y and Z and changing work flexibility policies."

alunchbox 5y ago

Rinse and repeat! Too many great products ruined in the pursuit of growth and greed.

hinkley 5y ago

There's an earlier Step 2 where they tell you that they aren't going to tell you how to manage your division, and then tell you that they won't pay for some of your initiatives. Because strangling an initiative by withdrawing all funding isn't saying 'no' I guess? I'll never understand how that works. Usually that squeeze happens in the second fiscal year, and in some cases the 'combine processes' step is characterized as a carrot instead of a stick.

calvinmorrison 5y ago

Depends. Plenty of companies growth model is through purchasing brands and combining "synergies". CHD is a great example. They acquire a compajy and its IP, but the factories and all and keep useful employees and buy everyone else out. Arm and Hammer, Trojan Condoms, Oxiclean, Toothpastes, toothbrushes, cat litter, everything in the grocery that's not food!

paranoidrobot 5y ago

A company that I worked for got acquired by a vastly larger company, who is in turn owned by an even larger company. When it was announced we were being acquired, one of the first questions was "What are the retention bonuses". "We don't plan to have any retention bonuses" is the answer that came back from the new owners. A few months later I'm talking to a VP of something-or-other in the acquiring organisation who's commenting "Yes, we've noticed you're having a lot of people departing. Company X who we acquired a few years ago had the same thing, we're not sure why". This was while being told "nothing will change for you", to be immediately followed by "We're getting rid of X and Y and Z and changing work flexibility policies."