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>'So MS Bought Nokia and ~30k employees for ~$7.2 billion last April. 3 months later, MS may now be firing ~half of the Nokia group. The executives who drove th

>'So MS Bought Nokia and ~30k employees for ~$7.2 billion last April. 3 months later, MS may now be firing ~half of the Nokia group. The executives who drove that catastrophic deal stay.' My understanding, primarily from friends at Cisco which has its own history of acquisitions and layoffs is that this is roughly standard procedure, catastrophe or not. Basically, there's always going to be a lot of overlap when acquiring another large company. Loads of people are made completely redundant and things that didn't come out via diligence are discovered. There's a wait and see period where some people leave, followed by jockeying for position and finally layoffs of people who remain redundant and/or lacked the awareness to pursue either of the former two options. Obviously, a merger which doesn't pan out would amplify the effect. What I wonder is how much such a process actually affects the success of these mergers? Do the consultants and banks who assist in these sort of things have a variable to account the back-biting scramble that will take place in each first year?

kyrra 12y ago
Cisco does buy a lot of companies, but only about as many as google has bought. Though Cisco has has more billion $ or higher deals. http://en.wikipedia.org/wiki/List_of_acquisitions_by_Cisco_Systems http://en.wikipedia.org/wiki/List_of_acquisitions_by_Cisco_S... http://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Google http://en.wikipedia.org/wiki/List_of_mergers_and_acquisition...
- tptacek 12y ago
  Cisco has a very different M&A strategy than Google. They add product lines through acquisition, in preference to building internally (if you're on a Cisco team and you're ever given an MRD for a product, the joke goes, quit and start a company to do it instead). As often as not, Google acquires companies to absorb the people. Google typically buys much smaller companies, and more selectively. I would be very surprised to discover that Google has acquired close to as many headcount as Cisco has. But I don't want to do the research work either. :)
  - ersii 12y ago
    What does "MRD" stand for? I've been searching for a definition but I can't seem to find any, that makes sense in this context. Given the context, I guess it's some kind of product development order?
    - tptacek 12y ago
      Marketing requirements document; the set of features for the next release of a product.
    - pionar 12y ago
      Market Research (or Requirements) Document It's a document that's usually produced by a product management group in a company that outlines (very vague, almost laughably so) the "market requirements" - what users will want/need - for a given feature or set of features. This is usually handed to developers/designers to come up with a "High Level Design" (HLD) that gives the "how" to the MRD's "what". It's usually only seen in larger software companies.
      - tptacek 12y ago
        It'd be more accurate to say that MRDs are an artifact of waterfall design. Waterfall is out of fashion, and so small companies tend not to use it, but if you're shipping hardware (like Cisco does) it's often more natural than agile.
  - dave1619 12y ago
    "I would be very surprised to discover that Google has acquired close to as many headcount as Cisco has. But I don't want to do the research work either. :)" In 2012 Google acquired Motorola Mobility with it's 20,000 employees. http://www.dailymail.co.uk/sciencetech/article-2148219/Google-completes-biggest-deal-history--buys-Motorola-12-5-billion.html http://www.dailymail.co.uk/sciencetech/article-2148219/Googl...
    - jychang 12y ago
- asuffield 12y ago
  Disclaimer: I have worked for Cisco, and no longer do so. Cisco is an engine for buying up small companies, digesting them, and extracting value from their products. It does not really do engineering or create its own product lines. As a result, it has polished the process of buying up companies, and progressively shutting them down while extracting the maximum sales value from the products that company has developed. The key thing is that this is the core model of Cisco's entire business. It's actually not too rough on the people involved - the profits of the milking machine are shared fairly generously with the people being milked - but it is all about purchasing products with "potential future value" and converting it into cash, not creating new value.
sanxiyn 12y ago
By the way, survey of mergers found that while most mergers fail, Cisco is an outlier making successful mergers one after another. It is said that Cisco analyzed successful and unsuccessful mergers and does data-driven, evidence-based decision making. http://www.overcomingbias.com/2010/03/hard-facts-mergers.html http://www.overcomingbias.com/2010/03/hard-facts-mergers.htm...
- incision 12y ago
  Interesting. 'Cisco figured out that mergers between similar sized companies rarely work, as there are frequently struggles about which team will control the combined entity.' I recall asking people there about why they didn't acquire certain companies that I thought would make a lot of sense from a technical / product perspective. The typical answer was right in line with that quote - that Cisco stays away bigger companies that others might try to swallow at high cost. That they look for logical acquisitions of specific products in the few hundred million dollar range, not billions.
  - taurath 12y ago
    So, we should let the comcast/time warner cable deal go through because there's a good chance they'll implode?
    - mahyarm 12y ago
      I would say they're already imploded and will become an even worse oligopoly. One of the companies will come on top in that struggle.
  - rmk 12y ago
    That's not really true. They bought SourceFire last year for a few billion.
    - incision 12y ago
      >'That's not really true.' Sure it is, there just happen to be exceptions. Of the 21 years and 136 Cisco acquisitions with prices on Wikipedia, 14 come in over $1B. The average price overall is $530M, and the average price excluding >$1B deals with $178M.
pasbesoin 12y ago
Further, people within the controlling interest tend to prefer dealing with those they know. Even if you are a high performer, being part of the now-controlled interest deals you something of the short stick, as they say. If your company is acquired, be prepared to move on. Regardless of personal performance, they may give you no choice.

kyrra 12y ago

Cisco does buy a lot of companies, but only about as many as google has bought. Though Cisco has has more billion $ or higher deals. http://en.wikipedia.org/wiki/List_of_acquisitions_by_Cisco_Systems http://en.wikipedia.org/wiki/List_of_acquisitions_by_Cisco_S... http://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Google http://en.wikipedia.org/wiki/List_of_mergers_and_acquisition...

tptacek 12y ago
Cisco has a very different M&A strategy than Google. They add product lines through acquisition, in preference to building internally (if you're on a Cisco team and you're ever given an MRD for a product, the joke goes, quit and start a company to do it instead). As often as not, Google acquires companies to absorb the people. Google typically buys much smaller companies, and more selectively. I would be very surprised to discover that Google has acquired close to as many headcount as Cisco has. But I don't want to do the research work either. :)
- ersii 12y ago
  What does "MRD" stand for? I've been searching for a definition but I can't seem to find any, that makes sense in this context. Given the context, I guess it's some kind of product development order?
  - tptacek 12y ago
    Marketing requirements document; the set of features for the next release of a product.
  - pionar 12y ago
    Market Research (or Requirements) Document It's a document that's usually produced by a product management group in a company that outlines (very vague, almost laughably so) the "market requirements" - what users will want/need - for a given feature or set of features. This is usually handed to developers/designers to come up with a "High Level Design" (HLD) that gives the "how" to the MRD's "what". It's usually only seen in larger software companies.
    - tptacek 12y ago
      It'd be more accurate to say that MRDs are an artifact of waterfall design. Waterfall is out of fashion, and so small companies tend not to use it, but if you're shipping hardware (like Cisco does) it's often more natural than agile.
- dave1619 12y ago
  "I would be very surprised to discover that Google has acquired close to as many headcount as Cisco has. But I don't want to do the research work either. :)" In 2012 Google acquired Motorola Mobility with it's 20,000 employees. http://www.dailymail.co.uk/sciencetech/article-2148219/Google-completes-biggest-deal-history--buys-Motorola-12-5-billion.html http://www.dailymail.co.uk/sciencetech/article-2148219/Googl...
  - jychang 12y ago
asuffield 12y ago
Disclaimer: I have worked for Cisco, and no longer do so. Cisco is an engine for buying up small companies, digesting them, and extracting value from their products. It does not really do engineering or create its own product lines. As a result, it has polished the process of buying up companies, and progressively shutting them down while extracting the maximum sales value from the products that company has developed. The key thing is that this is the core model of Cisco's entire business. It's actually not too rough on the people involved - the profits of the milking machine are shared fairly generously with the people being milked - but it is all about purchasing products with "potential future value" and converting it into cash, not creating new value.

sanxiyn 12y ago

By the way, survey of mergers found that while most mergers fail, Cisco is an outlier making successful mergers one after another. It is said that Cisco analyzed successful and unsuccessful mergers and does data-driven, evidence-based decision making. http://www.overcomingbias.com/2010/03/hard-facts-mergers.html http://www.overcomingbias.com/2010/03/hard-facts-mergers.htm...

incision 12y ago
Interesting. 'Cisco figured out that mergers between similar sized companies rarely work, as there are frequently struggles about which team will control the combined entity.' I recall asking people there about why they didn't acquire certain companies that I thought would make a lot of sense from a technical / product perspective. The typical answer was right in line with that quote - that Cisco stays away bigger companies that others might try to swallow at high cost. That they look for logical acquisitions of specific products in the few hundred million dollar range, not billions.
- taurath 12y ago
  So, we should let the comcast/time warner cable deal go through because there's a good chance they'll implode?
  - mahyarm 12y ago
    I would say they're already imploded and will become an even worse oligopoly. One of the companies will come on top in that struggle.
- rmk 12y ago
  That's not really true. They bought SourceFire last year for a few billion.
  - incision 12y ago
    >'That's not really true.' Sure it is, there just happen to be exceptions. Of the 21 years and 136 Cisco acquisitions with prices on Wikipedia, 14 come in over $1B. The average price overall is $530M, and the average price excluding >$1B deals with $178M.

pasbesoin 12y ago

Further, people within the controlling interest tend to prefer dealing with those they know. Even if you are a high performer, being part of the now-controlled interest deals you something of the short stick, as they say. If your company is acquired, be prepared to move on. Regardless of personal performance, they may give you no choice.