What happens to employees when a small company is bought-out by a much larger company?
tentoes asked:
What happens to the employees of the smaller company? The small company is very successful, but a much larger company buys it. Do the employees of the smaller company get a payoff, or only the founder(s) of the small company?
What happens to the employees of the smaller company? The small company is very successful, but a much larger company buys it. Do the employees of the smaller company get a payoff, or only the founder(s) of the small company?
Small company = >25ppl
Large Company = several hundred
I know that every deal is different, I’m just wondering if there is any “typical” proceedure.
Posted on July 13th, 2008 by admin
Filed under: Small Business
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Tags: Larger Company, Smaller Company
The least that can happen is that the bigger company will simply start to receive the revenues generated by the company they’ve purchased. That and maybe the sign on the building and the letterhead logos would change.
The most that can happen is the big company acquires patents, production or service techniques, capital equipment used for production or services, and they let all the small company’s employees go. This can happen when a big company is simply trying to get rid of a competitor, or attempting to “purchase” market share.
Generally, it’s somewhere in the middle - after all, the employees of the smaller company know how to do the work, so why upset the process?
There is no reason to pay any employee - they are not owners. Most often the large company only looks at the bottom line and starts getting rid of employees as a way to improve that. This could just be upper management with the higher salaries or actual production people. Employees also start jumping ship because they don’t enjoy working for a “BIG BOSS” somewhere out there in limbo land.
It depends on what is being purchased. Is the product line being purchased, is the new company buying the production facility, etc. Some jobs may be lost, but if you are skilled and good at what you do then you may keep you job. The owners/founders of your company may have made a list of their more “valuable” employees.
Pay outs are not typical. They may give you a few weeks or a month severence, but that will be about it.