When a company goes through a merger, it sometimes creates redundancies among the staff. There are often overlapping roles.
For instance, two businesses may both have needed a front office staff or an HR manager when they were operating independently. But if one business acquires the other, or if the two merge together, the resulting entity still only needs one HR manager or roughly the same size front office staff. Those roles and responsibilities are still important and must still be addressed at the new company, but they do not need as many people to do it since the companies are now operating as a single entity.
What does this mean for the staff?
In many cases, this means that the staff has to go through layoffs. After the merger or acquisition, the business owner decides to trim the workforce, so they let go of employees who are in these redundant roles.
There can also be some mismatches from a company culture standpoint. A small company may be absorbed by a larger company that has a very different corporate culture, and where employees naturally have very different goals and motivations. The previous workers from the company that was purchased may feel that they are no longer a good fit.
In some cases, this leads them to move on, so the issue of redundant roles is addressed naturally. Some of the employees do not like the new cultural fit and seek other employment elsewhere, helping to reduce the overall workforce.
But no matter how it plays out, mergers and acquisitions can create a lot of uncertainty for the workforce, even if there are long-term benefits for the company overall. It is important to understand what legal steps to take to navigate this process.