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This is wrong Which part exactly? Seems you just described why the layoffs happen? Two things can be true here, the new company can find cost savings by elimin
by mikeryan 26d ago
This is wrong
Which part exactly? Seems you just described why the layoffs happen? Two things can be true here, the new company can find cost savings by eliminating redundancies and have to cut deeper than desired to be able to service debt.
- sroussey 26d agoThe cost savings from consolidating things like HR, and the debt payments are different by orders of magnitude. The cost synergies will be a rounding error. Structural changes like stopping investment in the future, mass layoffs, and selling off assets (or rights to the assets) will be required.
- mikeryan 26d agoAgreed. The synergies mentioned above are there but it’s not like one HR team can suddenly handle having twice number of employees and open reqs. HR and accounting tend to scale somewhat linearly to the size of the business. Not to mention that both those orgs have massive tasks to take on as a result of the merger so at least for the next year or two those efficiencies will be hard to realize. In the case of media orgs like this those efficiencies are even less pronounced because it’s not like you can consolidate product lines.
- airstrike 26d agoThe part where debt service is the reason for layoffs. Cost synergies exist even in deals financed with zero debt.