4 ms·

Unfortunately, it's how M&A works since forever, even if the official statement is "The overall market has retracted". I guess most of the cuts are in the "non-

Unfortunately, it's how M&A works since forever, even if the official statement is "The overall market has retracted". I guess most of the cuts are in the "non-productive" departments like sales, marketing, hr and stuff like this.

kjs3 3y ago
It's not that they're 'nonproductive', per se; that's kinda pejorative. And it's not the 'market'. It's that you just don't need 2 HR, accounting, marketing, finance or other back-office departments, post-merger, so most of those folks become redundant. The acquiring company is going to convert to their systems asap anyway; economies of scale mean you don't need as many bodies to cover the acquisition. You usually try and keep a good percentage of sales guys if for no other reason than there are deals in flight you don't want to loose, but eventually those guys get whittled down too, usually right after the change from "small company fast and loose comp plans" to "corporate comp plan same as everyone". And, of course, the execs have cut their own deal. It's when they start cutting core engineering and support right away that you go "wassup with that???". In the cold calculus of M&As, 7% sounds like an entirely normal number, IME. I remember vividly when one of my companies got bought by IBM, and a couple of the younger back-office folks came by to ask me "what do you think?" because I'd been through M&As before. "I think you need to look for another job" was the best I could do, and it was a little disheartening.