It was majority employee-owned before the acquisition but is now majority owned by private equity firm. The main change I’m noticing is that everyone is being pressured to work uncompensated overtime (we’re all on salary here) and requests for training/professional development have been all but eliminated. They also initially hired a bunch of new employees with no specific work in mind and expected us to find the new people work to do then got rid of a lot of people about 1 year afterwards.
Has anyone else rode out a private equity buyout? It’s not terrible, but it is extra stress on top of an already stressful job. Is it a good idea to get out now? I’ve heard they typically sell after around 5 years of “optimization”. What happens then?
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Private equity will suck as much money out of the company as they can until it starts to fail and then they’ll sell it. Firing employees and making others do their work for no extra pay, if you have patents they’ll sell those, close facilities and force everyone into smaller spaces… literally nothing is off limits. Idk how much is publicly available, but if it is you can look at Avaya for an example. Went from being literally the biggest supplier of phones in the world with the majority of patents on applications for telecom technology to going bankrupt and having to restructure. They’re now on a single floor in a shitty building and most work has been outsourced.
You forgot that besides the patents sell-off, they’ll sell just anything the company owns to another company owned by them, just to lease everything back so the company can accumulate dept. In the same trend work gets sent to sub-contractors owned by them, and consultants get hired to make sure the value of the company rises because they invest in getting better at whatever.
Also, If most off these things don’t happen at your company, then all value is allready extracted and only the depts will pile up until bankruptcy.
they’ll sell just anything the company owns to another company owned by them, just to lease everything back so the company can accumulate dept
I’m assuming the last word was meant to be debt. How is this legal when it’s blatantly obvious that they’re essentially stealing money from their other debtors when they file bankruptcy? This is just theft with a few more steps.
I meant debt indeed. And as long as the company survives, nobody is going to investigate where the cash is flowing. If it does go bankrupt, someone might. The question is, who is going to pay for the investigation to prove the wrong doing?
Because these same people write the laws and spend billions fighting regulation?
Why did the employees allow the sale?
“mostly” was actually a subset of employees that owned a controlling interest and shared with some more passive investors. I don’t know the details on how the PEF got a majority but I imagine the passive investors were bought out and can’t imagine it took many employees to defect to produce the majority.
A lot of people already said it… sorry for all the doom and gloom.
If you can, gtfo and if you have stock get rid of it. What you see is just the beginning. Next stage all the most competent employees will jump ship, and will not be replaced. Leaving not only fewer employees to do the same work, it also leaves the ones without the skills and knowledge.
It will get sour fast, and whoever is in charge is there for the private equity to maximize their ROI. So no use talking to management or HR.
The strategy is to strip the company to the bones. Anything that can be sold will be sold (Buildings, furniture, IP). And if the company needs it to operate it will be leased back at a monthly rate. All cash this generates is pulled from the company to the PE firm. If they can they will saddle the company with a debt for the purchase of itself, so they can have the company not only pay that back, but with interest (a leveraged buyout). Some of these assets sold off can easily go to other subsidiaries of the same PE firm… such as real estate. Assuring their long term profitability.
The strategy is to strip the company to the bones. Anything that can be sold will be sold (Buildings, furniture, IP). And if the company needs it to operate it will be leased back at a monthly rate. All cash this generates is pulled from the company to the PE firm. If they can they will saddle the company with a debt for the purchase of itself, so they can have the company not only pay that back, but with interest (a leveraged buyout). Some of these assets sold off can easily go to other subsidiaries of the same PE firm… such as real estate. Assuring their long term profitability.
Add in “cry to any reporter that will listen that your business is ‘failing’” and you have the Eddie Lampert (Sears/Kmart) strategy.
Has anyone else rode out a private equity buyout?
You could ask if you are eligible for a retention bonus. This is a cash award that is given if you stay X amount of time, or if they lay you off before X amount of time. These are commonly given to key employees when a large transition is happening. It should be a significant amount. About 10 years ago I was offered an $11k retention bonus and accepted it. It doesn’t require you to stay working there, you could leave at any time, but it gives you a bit of protection if they part ways with you early, and if they don’t you get a nice chunk of change at the end of the period. I didn’t think I’d say, but things did get a bit better (until they got worse again), but I did get the bonus, and was laid off within 12 months of the payout (so about 3 years later after the retention bonus offer).
If they say “no”, then they’re telling you that you’re either not valuable enough or that they are keeping their options open for laying you (and likely others) off. Brush up your skills and resume and start looking elsewhere. You’re likely not going to be fired/laidoff immediately, but its its not going to get better.
Private equity = Fisher
Company = FishThe company is going to be gutted and filleted.
It’s what private equity does. Take something of value to someone else, destroy it in order to harvest that value for themselves. “Locusts” are another apt analogy.
Same happened at my company. I had seen the writing on the wall, so I bounced right before it happened.
Are you at Moog?
Keyboards or ball joints?
