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How Mergers and Acquisitions Affect employees

Mergers and acquisitions have become quite common in the current marketplace to acquire products and technologies, improve productivity and profit, and to reduce overall expenses. When corporates merge or take control over one another, there are usually instances of redundancy, leading to layoffs or shifting roles of your employees. The effects of such transactions on employees can be negative if companies do not take care of mergers and acquisitions properly.

During such transactions, there are minimum two groups of employees involved with different styles, cultures, and backgrounds. Learning a new culture isn't easy for any of the employee, but is essential for the best merger to happen.

Mergers and Acquisitions Can have Multiple Impacts on the Employees Like:

1. Stress:

Change is difficult for everyone including employees as they are not involved in decisions that affect their jobs. During mergers and acquisitions, change can be difficult, leading to stress and can impact the morale of employees. To avoid such circumstances, business owners or CEO should communicate all the important information to the employees so they don't have to wary of the unpredictable consequences. To the extent possible, owners and teams responsible should strive to share pertinent information about how the transactions will affect the employees and what exactly is happening. 

2. Fear Of Job Loss:

As stated above, during mergers and acquisitions, many employees were asked to leave either due to their inefficiency for the newly made company or because of the better option for the same position they are hired for. When two or more organizations join, culture cash is certain. As these two different groups get to know each other, there will certainly be conflict on both sides. Employees may fear to lose their jobs due to the merger. This fear can, later on, affect the productivity of the employees as they begin planning to leave the job and seek jobs elsewhere.

3. Competitiveness:

Indubitably, employees who are concerned about their job security are likely to be more competitive than the ones who have complete job security. Thus, such employees start competing with the others, resulting in conflict and sometimes, even violence. During mergers and acquisitions, it is important for HR professionals and business owners to be aware of any emerging negative competition among employees to ensure that nothing can impact the new business. While competition is good, over or negative competition can lead to negative conflict within the organization. 

How To Deal With Such Situations

When corporate mergers, redundancy instances are very likely to occur, which can lead to shifting the role of employees or even laying them off? While layoffs can't be avoided, it is better if you hire mergers and acquisitions law firms to make these transactions smooth for your employees. Besides, it ensures that none of your employees goes against your new company due to any reason. These lawyers can help in reducing uncertainty amongst the employees. Also, they can help you know your right and liabilities after these transactions. During such transactions, it is important that the employees that are being laid off should be informed immediately, and should be given proper severance packages, and M&A lawyers can help in such instances.

Preparing Employees For Mergers & Acquisitions

1. Focus on training

All the employees should be made aware of the procedures, policies, and guidelines of the new companies from the merger or the acquisition. Create a proper training plan to explain all the employees of these important guidelines. 

2. Prepare Employees For A Culture Shift

The culture of organization changes with the mergers and acquisitions, which can push employees to take on an unmotivated attitude. So, it is better if you prepare your employees for the cultural shift they can experience in their new working environment. 

3. Motivate Your Employees

Merger and acquisition is not the best time for employees; however, you can increase the morale and productivity with motivation. Ensure that you are putting aside enough time to discuss the problems and concerns of your employees so as to motivate them that you are listening to whatever they have to say. 


Merger and acquisitions are important for profitability, but this time-period is difficult for both owners and employees. So, set aside time for employees to connect with them in the form of meetings, social gatherings, etc. It will encourage employees to take interest in the new company and work with the same enthusiasm as in old company.

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