How to survive when your company is acquired

Dec 15, 2022 5 mins

How to survive when your company is acquired
author
Lorraine Posthuma

Freelance translator and journalist

When a business is bought or taken over, it can be a strange time for staffers. You only have to look at Twitter to find a prime example. Elon Musk began making noises about buying the micro-blogging site in April 2022, but didn’t close the $44 billion deal until November – leaving staff more than six months to watch, wait and worry. Happily, most acquisitions don’t hit the headlines, though they can still be stressful for all of the employees. So what can you do about it?

Mergers, acquisitions, and company sales are all a natural part of business as no company can afford to stand still. Envisioning a new future can be exciting for the top executives, but what about staff? In practice, they are often left with many unanswered questions: Is my position important enough to keep? What does the future hold for my career? Will I be needed, let alone appreciated, after the acquisition?

It’s natural to be concerned, according to Beth Trakimas, an expert in tech mergers and acquisitions, a human resource consultant in Seattle, and the founder of Mirror People Intelligence, a business intelligence consultancy. “Being acquired is disruptive and change is absolutely guaranteed,” says Trakimas. “However, it doesn’t have to mean that things get worse. In fact, it can lead to things getting better.

Much depends on how management handles the transition. There needs to be open and honest communication with staff before the acquisition takes place. Emotions surface so employees need to feel valued. That doesn’t always happen, however. (Again, consider Musk’s words to staffers at Twitter where he asked them to “commit to a hardcore culture.”) The result is that staff often look elsewhere. “People don’t decide to leave a place if they feel valued, the work they are doing is important, and they are continuing to have some fun with their teammates,” Trakimas says.

When a company loses the confidence of its employees, respect for the organization declines along with the amount of work completed and the quality of that work.

Cultural fit is key

95% of executives say “cultural fit is critical to the success” of an integration, according to a report from McKinsey. Trakimas agrees. “It’s important to remember that both companies have their own distinct cultures that are dynamic. When a transaction happens, those dynamic systems will immediately start to evolve whether you do something proactive or not,” she says.

Business leaders have an opportunity to create a new company culture that implements the best strategies and practices from both organizations, she says. “You cannot control the evolution of culture, but you can guide it if you are proactive in understanding what makes a culture uniquely successful and think through how to sustain that.”

Almost half of key employees leave after a major acquisition, and within three years that number has grown to 75%, according to EY research. It’s not uncommon for newly acquired companies to be dissolved after a few years. So if one out of every two people [in a company that has been] acquired leaves, that tells you most companies are not successful at building company culture after an acquisition,” Trakimas says.

That has been the experience of October Jin, who has been through acquisitions at three separate tech companies. “Every time I went through this, it felt like a huge cultural loss,” Jin says. “The cultural reasons why I originally joined these firms disappeared as the companies evolved. At one firm they used to do annual employee awards and it was a blast. They stopped them after the acquisition. That was just one event that was canceled. The fabric of the culture felt like it was ripped away from us.

Jin left the first company after the acquisition, but now thinks that she should have gone even earlier. She left the second just before the acquisition, and quit the third a year after it happened. “Two of the firms went into complete oblivion. The last firm is still around, but it’s a shell of a company and culture now,” she says. The first firm was dissolved four years after the acquisition, and the second company had lost 90% of its original employees by the end of three years.

What can you do to survive?

Adapting to the culture at any workplace is hard enough, but what about when your company has been swallowed up by another. Here’s what you can do:

1 Stay calm. Jin advises anyone in a similar situation to keep their head. You don’t need to start looking for a new job immediately. Take your time and make sure that you make the best of your time in the company. “Don’t panic. Don’t assume the worst. Don’t leave before you are ready.”

2 Educate yourself. Make an effort to read up on the other company, she adds. “What’s in it for you? Educate yourself on the acquiring company and what their track record is to understand what direction this is headed,” she says. Check out articles online, and in newspapers and magazines about the transaction or about the new executive team. Watch the news. Look at the other company’s website for statements on the deal.

3 Analyze what you learn. Listen carefully to any information, Jin adds, and think about what words are being used. There may be no mention of downsizing, for example, but perhaps the company talks of the need for greater synergies, which can often involve making cutbacks. “What messaging seems vague? Try to make sense of the noise,” she says. Managers aren’t always open or honest, she warns. “We were fed what we wanted to hear, what would keep us there. Eventually, people see through those lies.”

4 Consider your options. It’s essential to find out if you have a future with the new entity and what your promotion prospects will be. If the answers you receive are positive or inspiring to you, that’s great, but if they’re not, be realistic and honest with yourself. Start looking to the future and finding what’s next for you, Trakimas says. “Being acquired is an incredibly disruptive process to one’s career and there will be a period where some answers to your basic questions may be unclear. Keep asking them until you get sufficient clarity.”

5 Be prepared to go. It’s good to be flexible and open to trying new things, but it’s also critical to make an informed decision about staying with the company or leaving, says Trakimas. “You should treat the process as an opportunity to decide if the company is still the right place for you,” she says. “It may be or it may not be, but do not wait for the new company configuration to decide for you. Seek answers to your questions, assess for yourself whether the work opportunity is worth it and whether the new company is valuing you for your efforts.”

Jin agrees that it’s a good idea to prepare for departure. “It may not go your way and if you’re prepared, you’ll be ahead of the game,” she says. Be assured that most companies don’t insist that staffers knuckle down or leave promptly as Musk did at Twitter, but there’s no harm in preparing for the worst, while hoping for the best.

Photo: Welcome to the Jungle

Follow Welcome to the Jungle on Facebook, LinkedIn, and Instagram, and subscribe to our newsletter to get our latest articles every day!

Topics discussed
Oops
Resource unavailable in the requested language
Oops
Resource unavailable in the requested language