What Happens When Your Company is Merging

For any startup and small business, acquisitions or mergers can change the company’s future. When a company is merged with a larger company, it means that big players have seen your company’s potential and would like to benefit from its popularity.

For employees, mergers can be scary prospects because they may affect their job security. But, what does happen during these acquisitions, and what should you do as it takes place?

Here are the things you need to know about company mergers:

What is a Merger?

A merger entails two companies combining to make new management or organisation. Usually, the owners or officers from either company see the benefits of merging to create the best company in the industry. Further information regarding the differences in company formation can be found on the S Corp vs C Corp blog. 

Does Everything Change Immediately After A Merge?

Changes don’t happen immediately when a merger is announced. During this time, the management is slowly working on consolidating their paperwork while the employees continue working. The administration will also start creating new policies, time tracking and payroll systems and make critical financial decisions for the new company.

The management will also inform employees regularly about the company’s current status and give them options regarding their job status. Normally, however, it’s business as usual for employees.

Do Existing Employees Get Laid-Off After An Acquisition?

The future of existing employees depends on the current management. Usually, it’s not uncommon for new employers to keep their current staff while others replace them with their own chosen team.

It can be hard to tell whether an employee needs to think about a new job, especially in departments that overlap like accounting, human resources and technology. When they overlap and have employees working in the same position, they will pick the employee who performs better to minimize the team.

What Can Employees Do During The Merger?

Whether you are facing termination or not, you should not immediately feel pessimistic about your job future. The new management will sit down with the employees to talk about their job responsibilities and see what employees can bring to the table.

During this time, it is ideal that employees review their employment contracts and see the clauses for severance pay, termination protections and the survival clause as they may change the employer’s position about terminating you from your position.

What Is The Termination Process? How About The Benefits And Pay?

If one is let go due to the merger, a career transition or termination process takes place, and usually, it will take 30 to 90 days. Employers may even assist the employee in finding new job opportunities.

If the employee in question is under a legally binding contract, the new employer can adjust the pay and benefits you may get. The changes may also be seen in their retirement and healthcare, requiring employees to change their plans to match the management’s requirements and get their credits counted in the new program.

If you find yourself employed in a business or company that is acquired, don’t immediately think about the negative impacts on your career. It would help if you stayed calm, saw what rights and protections are given to you and were optimistic that you wouldn’t get terminated. Read your contract and speak to your immediate supervisor if you want to know more about the transition. Having all the information on hand and keeping informed can help you make critical decisions no matter what outcome occurs.


3 Comments Add yours

  1. SRIKANTH says:

    Very informative 👍🤝


  2. Very good posting, Kally! This will be more and more of our reality, and maybe a lot of people will loose their jobs. ;-( xx Michael


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