November 20, 2014

Showing the door to thousands

“Microsoft to Lay Off Thousands, Most From Nokia Unit,” announced Nick Wingfield at nytimes.com on July 18, 2014. “The job cuts would be the largest in the company’s history, representing about 14 percent of its work force,” ran the report. “Most of the [18,000] cuts will come from the Nokia mobile phone business Microsoft acquired this year.”

This is one of the dilemmas faced by business owners looking to sell 100% of their business. What will happen to your employees after you leave?

Most business owners appreciate the input of their employees in creating the value in their company. Unfortunately, it’s not always possible for exiting owners to secure a good solution for their employees when the time comes to sell.

If the purchaser is an international giant buying a relatively large company, then one might start to hear percentages flying around like those quoted in the news article above.

In the case of smaller companies, a few owners might look to share part of the sale value with their employees. In some cases, exiting owners convince the purchaser that the employees have to stay with the company for a certain time period.

It might be tempting to tell employees that everything will be OK, that they’ll be fine.

But I would advise the exiting owners or management not to tell little white lies to their employees about what to expect after the sale. It’s much fairer on the employees, and it avoids the vendor feeling cheap if he bumps into them later.

The article in nytimes. com: Microsoft to cut up 18000 jobs

The oldie of the week: Fleetwood Mac – Little Lies (1987)

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