
Ask HN: Company acquired by private equity firm. What to expect? - big_bang_bong
I work for Mcafee Which Intel sold to a private firm, TPG? As a senior engineer, what should I expect now?<p>Should I prepare my resume and start looking elsewhere? Any point in holding on to see what TPG wants from the company?
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WheelsAtLarge
The new firm will be looking to reduce costs 1st. Expect reduction in benefits
and perks, work increase and layoffs. The goal is to keep it for a few years
until they can sell it at a profit or go the IPO route.

It's not always a bad thing. They want the company to succeed so they can get
their money out. Just make sure you thrive along with the company and don't
become redundant - don't be scared, be proactive.

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supahfly_remix
I worked for a company that was bought by private equity. Your management
screwed up and couldn't figure out how to make money with this division. A
takeover by PE is rarely done if business is going well.

This comment is accurate. To add, these PE firms will chop up your company and
"unlock hidden value" by selling subdivisions to other companies. They
sometimes do some "financial engineering" to load up the company with debt.
Take a look at what happened to Freescale.

My suggestion is to develop your skills and to move to another company when
you find a better opportunity. If you feel you are going to be laid off, then
act sooner.

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twunde
Yes, prepare your resume. I don't know specifically about TPG, but in general
the MO of private equity firms is to cut costs, which means layoffs and
removing perks. Reasons to stay? Buyouts or bonuses.

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apohn
The following is my experience with it. Feel free to skip over it. The short
version is: Expect a tough time unless you are senior management. Unless you
really like your job or are stuck, update your resume and start looking
around.

I recently left a company that was taken over by a private equity firm at the
end in 2014. I stayed for roughly 1.5 years post-acquisition, but decided I
had to leave about a year after the acquisition. I stuck around for that year
because I was doing some interesting work and I wanted to see what a private
equity firm would do. Just for reference, the company had roughly $1B of
revenue and about 3500 employees worldwide.

WheelsAtLarge said “The goal is to keep it for a few years until they can sell
it at a profit or go the IPO route.” If you look at every future decision the
company makes through this lens then every decision makes sense. In the grand
scheme of things, what the firm wants to do it smart. They are taking a
company that is struggling (for whatever reason) and they streamline the
products, people, processes, etc, fix it, and make it easy and appealing to
sell/IPO. It’s painful but it needs to be done. At a company level it’s good.
But for the individual person it can be very difficult.

Within 3 months of the acquisition we had a round of layoffs, benefits cut
(doubling of healthcare premium and an introduction high deductible plan), and
frozen or shrunk budgets. They also started a process of restructuring
teams/the organization and consolidating where they could.

Throughout the first year a lot of people left company. It got to the point
where people just feared Friday or end of the Month/Quarter because of the
goodbye emails. At some point the goodbye emails stopped and you found out
people left when your email bounced or somebody when a project suddenly got
reassigned to you.

Over the next year they revealed the strategy of which product were be focused
on and cut. Some products had severe reductions in resources and basically
went into maintenance mode. Many of these decisions were good.

A little after the first year post-acquisition they had another round of
layoffs. This shocked a lot of people because when you combined the initial
layoffs with the number of people who left, we were understaffed in a lot of
departments. Every quarter the CEO said headcount was below target and we
needed more people. The second round of layoffs felt stupid and brutal, and
was purely about the numbers. This caused more people to leave.

There was another trend in the company. It because obvious that only senior
management was worth rewarding and retaining. Everybody else was a cog in the
machine that is a tech company. A team would need to lose 2-3 people before
they would let you hire a single person. And the only people you could hire
was somebody with 0-2 years of experience. We’d lose 3 great people with tons
of experience and could only replace them with somebody straight out of
college because “they were hungry and had high potential.” The end result was
predictable. The good people were overworked and frustrated, and the new
people got very little support and they struggled.

I left because I was badly overworked and was provided zero incentive to stay
despite telling people how unhappy I was. I thought if I worked hard and did
well I’d be rewarded. It was astonishing how little they cared about people
under senior management. I felt like they were incentivizing people to leave
so they could replace them with inexperienced people just to show buyers how
low their employee costs were. Morale was really bad outside of senior
management and all we got were platitudes.

I wish I could say this was unique to myself or the company I worked for. I
went on Glassdoor at one point and looked at other companies that had been
acquired by the same firm. All of the reviews basically say the same thing and
you can see a similar progression of what transpired.

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big_bang_bong
Thanks for the detailed writeup. Anything I can do to excel here? I have spent
4 years with the company and am now in a senior architect role. Wouldn't want
this to go to waste. Have never received bad rating, have good relationships
with managers and people generally accept me as a doer and go-to guy.

~~~
apohn
I forgot this. If you are serious about staying with the company, move into or
work with a group that is visible and known to the higher ups. Usually this
happens when the manger is very good at managing upwards.

In my last company many good people who got fired were in groups that did
great work, but did not have a strong manager. Strong managers advocate for
the group and show off what the group does. They make the group visible in the
company and bring interesting work to the group.

If you feel like you are just an ant in a group that nobody knows about, it's
easy for somebody else (probably somebody who have never even heard about) to
draw a line through your name in an excel sheet defining who to keep and who
to cut.

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nness
Probably broad-ranging redundancies? Seems to be relatively common after large
acquisitions, regardless of product or industry.

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romanovcode
Unfortunately you should expect to get fired.

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big_bang_bong
Care to elaborate?

