The Battle for Productivity
Once the deal has been announced, morale deteriorates. When suspicions are confirmed and layoffs are announced, staff productivity can head south. While CFOs usually have strong financial incentives to keep working hard, other staffers may not.
Wasserman, who had a large number of stock options and a retention bonus, praised his team’s hard work in pulling the deal together, but was also honest in his appraisal of productivity once the deal had been announced. (Employees received stock options as part of the standard employment contract, and vesting was accelerated due to the acquisition, while those scheduled for layoffs received retention bonuses to stay and help with the transition.) “Were they as productive as they would have been if Symantec hadn’t made the offer? Probably not,” he says. “Were they productive enough? Absolutely. The wheels did not fall off.”
At ON Technology, most of the job losses from the merger came from departments that reported to Wasserman. Laid-off J.D. Edwards employees received a “fair” severance package from PeopleSoft, says Allen, who won’t comment further on that aspect of the acquisition. (Allen says he received a severance package commensurate with his role as executive vice president and a decade-long tenure with the company.)
Allen was pleased with the J.D. Edwards employees’ hard work during the acquisition. “They put their heads down and got the deal done,” he says. “They knew it would be a good strategic decision for us and for our customers. I didn’t have to spend a lot of time convincing them to work hard.” In all, about 750 J.D. Edwards employees lost their jobs, about 125 of them in finance. But because PeopleSoft scoured its own ranks for redundancies as well, some high-level J.D. Edwards finance staffers ended up with jobs there.
Let Them Vent
Most employees displaced by a deal receive outplacement assistance and severance packages, but what’s most important to all is communication, says Larraine Segil, a partner at Vantage Partners, consultants on relationship management who worked with Compaq before its merger with Hewlett-Packard. Her advice to CFOs: keep staffers posted on downsizing plans. “When you know who is going to stay and who is going to go, do it fast,” she says. Taking too long puts staffers “in paralysis, and productivity really suffers.”
Wasserman communicated face-to-face with the people who were losing their jobs. “It was about just walking into offices, talking to people, telling them how important it was that we continue to work hard,” he explains. “And you have to let them vent.”
Allen also scheduled multiple meetings with his teams through the process. “The truth never gets any better,” he says. “You have to be honest. If you don’t know something, admit it. What you’re trying to do is drive out fear, uncertainty, and doubt wherever you can.” The truth “may not give people a sense of comfort,” he says, “but it will give them the confidence that they’ll be treated with respect and dignity.”