Thursday, February 09, 2017

The Long-Term Layoff

 
M&A layoffs by acquiring companies come in two main flavors: immediate layoffs after the acquisition is closed, and long-range layoffs once the knowledge of the acquiree has been assimilated into the acquirer. 
 
I have been on the acquisition side a couple of times, and few people know how medieval it can get during initial cuts.  Managers go through lists of names and simply check off boxes on who will be eliminated.  They are just names and checks, but the result is a few hours later that person is gone.  It would make Stalin proud.  And few people have any clue how simple statements can get them doomed. For example, one engineer at an acquiree company mentioned in passing that he might want to go into marketing one day.  That simple comment got him the axe when the culling came.  The company was acquired for their engineers, and anyone who didn't want to stay an engineer wasn't wanted.
 
I am now on the receiving end of an acquisition, but it was a "friendly" buyout and there were no immediate cuts after SuperGiantCo bought the little start-up.  But this is covering up the long-range plan to assimilate the smaller acquisition into the collective whole of SuperGiantCo. 
 
The main way they are doing this is by "boiling the frog slowly" on engineers and "salami slicing" the management.  By the former, they create ways of "knowledge sharing" between acquiree engineers and SuperGiantCo engineers that are really "knowledge transfer" from the former to the latter.  But this is done a little at a time, in a very natural, friendly way through exchange programs, meetings, joint projects and the like.  What the acquiree engineers don't realize is that they are slowly transferring their brain to SuperGiantCo engineers, and in 2-3 years they will not be needed.  They are basically training others to do their job, but in a way that seems benign.  Already SuperGiantCo has "shadow design centers" doing the exact same thing as the acquiree company used to do.  Once those shadow design centers are up the learning curve, my engineers will become redundant and ready for the chopping block.
 
On the management side (my side) they are doing "salami slicing".  Instead of removing responsibility of the old managers all at once, they do it one small piece at a time.  No single piece means much, and in fact the offload sometimes might be welcome, but after a while you realize that your whole job has been sliced away piece by piece and given to various managers at SuperGiantCo.  This is also about a two year process.
 
At the end SuperGiantCo won't need either the engineers or managers from the acquiree company.   At that time they will either let us go, or for a few lucky ones might be Borg enough to land a position in the parent company. 
 
 

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