Merger and acquisitions between companies are driven to relieve distress, bring operational efficiency, acquire a new line of business, take on a new skill, improve the balance sheet, enhance revenues, etc., This is not an exhaustive list, there can be many more reasons that drive companies to either merger or acquire others. Different companies during their life cycle use mergers and acquisitions as tools for growth and improved performance.

Mergers and acquisitions impact employees profoundly. The commonly felt impacts on the workforce are:

  1. Job loss
  2. Disempowerment or empowerment
  3. Role reduction or role enhancement
  4. Financial impact

These impact employees psychologically and materially for which they have to be prepared. The good part is that mergers and acquisitions often are relatively long-drawn affairs and the buzz within the company of an impending acquisition or merger often gets leaked. Some promoters do manage to keep these confidential to a point but given the nature of this activity, teams of specialists from business, corporate affairs, finance, and even human resource departments are required to be involved, the word does leak out.

Cultural change is one major change that impacts everyone in the organization. This is often seen in cases where a merger and acquisition lead to a change of top leadership. New workstyles, business processes, bosses, targets, goals and there is in some cases changes in the workplace itself which employees have to adapt to.

For those who have their roles, payouts reduced or are laid off the task of posting resumes, going through multiple rounds of interviews, negotiating payouts, getting offers, and starting afresh are major worries.

The most challenging times are for those who are neither laid off, nor have their roles enhanced but continue into the newly merged entity. They find the changed environment difficult to adapt, erstwhile colleagues and teams have been redeployed elsewhere, new hierarchies emerge and the painful process of adjusting begins. We often underestimate the psychological impact of these changes on employees but organizations who recognize these challenges and help the workforce adjust to new realities succeed in reaping the fruits of these corporate events. Those who ignore, suffer the consequences. And believe me there are many who belong to the latter category.

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