Recent layoffs and now focus on corporate valuation - are owners looking to sell?

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IthinkICan
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Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by IthinkICan » Sat Jul 13, 2019 8:23 pm

It's been a crazy few weeks at work. Evidently our owners recently took on new investors. We've had a travel freeze for a couple of months, and layoffs over the last 2 weeks. The owners were visiting regional offices last week to evaluate and try to put people at ease (not sure that worked). We had been focusing on growth the last coupe of years, but the focus now seems to only be on corporate valuation. I think that's why they went through a sudden "right sizing" exercise. Is it reasonable to think that they are looking to sell?

How often have you seen a company sale work out OK for employees of an acquired company? They said they really want me to stay, but I have to admit that I feel anxious.

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Re: Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by HEDGEFUNDIE » Sat Jul 13, 2019 8:27 pm

IthinkICan wrote:
Sat Jul 13, 2019 8:23 pm
We had been focusing on growth the last coupe of years, but the focus now seems to only be on corporate valuation.
Valuation includes growth. It’s actually the most important component.

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IthinkICan
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Re: Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by IthinkICan » Sat Jul 13, 2019 8:32 pm

HEDGEFUNDIE wrote:
Sat Jul 13, 2019 8:27 pm
IthinkICan wrote:
Sat Jul 13, 2019 8:23 pm
We had been focusing on growth the last coupe of years, but the focus now seems to only be on corporate valuation.
Valuation includes growth. It’s actually the most important component.
That is good to know. The change in vocabulary is making a lot of us nervous.

anoop
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Re: Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by anoop » Sun Jul 14, 2019 12:54 am

IthinkICan wrote:
Sat Jul 13, 2019 8:23 pm
It's been a crazy few weeks at work. Evidently our owners recently took on new investors. We've had a travel freeze for a couple of months, and layoffs over the last 2 weeks. The owners were visiting regional offices last week to evaluate and try to put people at ease (not sure that worked). We had been focusing on growth the last coupe of years, but the focus now seems to only be on corporate valuation. I think that's why they went through a sudden "right sizing" exercise. Is it reasonable to think that they are looking to sell?

How often have you seen a company sale work out OK for employees of an acquired company? They said they really want me to stay, but I have to admit that I feel anxious.
You don't give much info -- is this a small/medium/large company? What stage was it at? What is the field/business they were in?

Based on what you say about layoffs and the travel freeze it means the company is now being run by bean counters and they will milk it for it's worth. Whether this is good for employees depends on many factors. Sometimes, they will offer some lucrative packages to keep key employees during the milking phase. In general, they will tend to lose their top talent (if they haven't already) so the company really won't go anywhere.

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Re: Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by CurlyDave » Sun Jul 14, 2019 1:12 am

anoop wrote:
Sun Jul 14, 2019 12:54 am

...Based on what you say about layoffs and the travel freeze it means the company is now being run by bean counters and they will milk it for it's worth. Whether this is good for employees depends on many factors. Sometimes, they will offer some lucrative packages to keep key employees during the milking phase. In general, they will tend to lose their top talent (if they haven't already) so the company really won't go anywhere.
I agree.

One sure-fire sign the company has become a cash cow is when most of the high level new hires have MBA degrees.

It makes a lot of sense to dust off your resume and keep your contacts current. Even if you don't end up moving you might get a better sense of your real value.

With today's hot economy and low unemployment, right now might be the best possible time to look for another position.

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Re: Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by HEDGEFUNDIE » Sun Jul 14, 2019 3:34 am

anoop wrote:
Sun Jul 14, 2019 12:54 am
it means the company is now being run by bean counters and they will milk it for it's worth.
CurlyDave wrote:
Sun Jul 14, 2019 1:12 am
One sure-fire sign the company has become a cash cow is when most of the high level new hires have MBA degrees.
As an MBA-toting bean counter, let me just point out the obvious, which is that investors who just purchased a company have every incentive to see their investment appreciate.

If OP’s job truly adds value to the company, he/she will be fine. If not, then it was only a matter of time anyway.

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Re: Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by sfnerd » Sun Jul 14, 2019 3:39 am

It could mean they are trying to sell, or it could mean they are trying to raise money. Higher valuation means new money coming in devalues the current investors' equity.

But most likely, they are looking to sell. New investors will want a return on investment. Who knows what the time frame is, though.

Of course they want you to stay, because employee turnover looks bad for potential buyers or investors. It will also negatively affect performance of the business, and that looks bad, too.

Is the business profitable? How is top line growth and bottom line growth?

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Re: Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by anoop » Sun Jul 14, 2019 3:50 am

HEDGEFUNDIE wrote:
Sun Jul 14, 2019 3:34 am
anoop wrote:
Sun Jul 14, 2019 12:54 am
it means the company is now being run by bean counters and they will milk it for it's worth.
CurlyDave wrote:
Sun Jul 14, 2019 1:12 am
One sure-fire sign the company has become a cash cow is when most of the high level new hires have MBA degrees.
As an MBA-toting bean counter, let me just point out the obvious, which is that investors who just purchased a company have every incentive to see their investment appreciate.

If OP’s job truly adds value to the company, he/she will be fine. If not, then it was only a matter of time anyway.
If the OP was in the business of innovation for building next-gen product and the company changes its focus to cost efficiency (because that is what bean counters excel at, without casting judgement on you personally), then while OP may have been useful to the company before the new investors came in, his role may now be questionable.

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Re: Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by HEDGEFUNDIE » Sun Jul 14, 2019 3:55 am

anoop wrote:
Sun Jul 14, 2019 3:50 am
HEDGEFUNDIE wrote:
Sun Jul 14, 2019 3:34 am
anoop wrote:
Sun Jul 14, 2019 12:54 am
it means the company is now being run by bean counters and they will milk it for it's worth.
CurlyDave wrote:
Sun Jul 14, 2019 1:12 am
One sure-fire sign the company has become a cash cow is when most of the high level new hires have MBA degrees.
As an MBA-toting bean counter, let me just point out the obvious, which is that investors who just purchased a company have every incentive to see their investment appreciate.

If OP’s job truly adds value to the company, he/she will be fine. If not, then it was only a matter of time anyway.
If the OP was in the business of innovation for building next-gen product and the company changes its focus to cost efficiency (because that is what bean counters excel at, without casting judgement on you personally), then while OP may have been useful to the company before the new investors came in, his role may now be questionable.
Cost cutting is only one lever to driving increased valuation, and not the preferred one. After all there is only so much cost you can cut.

Revenue growth, on the other hand, is theoretically unbounded. If the OP’s job was actually to “build next-gen product” that met a clear market need, then he/she will be fine.

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Re: Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by anoop » Sun Jul 14, 2019 4:10 am

HEDGEFUNDIE wrote:
Sun Jul 14, 2019 3:55 am
anoop wrote:
Sun Jul 14, 2019 3:50 am
HEDGEFUNDIE wrote:
Sun Jul 14, 2019 3:34 am
anoop wrote:
Sun Jul 14, 2019 12:54 am
it means the company is now being run by bean counters and they will milk it for it's worth.
CurlyDave wrote:
Sun Jul 14, 2019 1:12 am
One sure-fire sign the company has become a cash cow is when most of the high level new hires have MBA degrees.
As an MBA-toting bean counter, let me just point out the obvious, which is that investors who just purchased a company have every incentive to see their investment appreciate.

If OP’s job truly adds value to the company, he/she will be fine. If not, then it was only a matter of time anyway.
If the OP was in the business of innovation for building next-gen product and the company changes its focus to cost efficiency (because that is what bean counters excel at, without casting judgement on you personally), then while OP may have been useful to the company before the new investors came in, his role may now be questionable.
Cost cutting is only one lever to driving increased valuation, and not the preferred one. After all there is only so much cost you can cut.

Revenue growth, on the other hand, is theoretically unbounded. If the OP’s job was actually to “build next-gen product” that met a clear market need, then he/she will be fine.
Seriously, what do you think, given all your experience, has a higher probability?

My guess is cost cutting (increased offshoring if that is the industry they are in) + financial engineering.

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Re: Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by HEDGEFUNDIE » Sun Jul 14, 2019 4:48 am

anoop wrote:
Sun Jul 14, 2019 4:10 am
HEDGEFUNDIE wrote:
Sun Jul 14, 2019 3:55 am
anoop wrote:
Sun Jul 14, 2019 3:50 am
HEDGEFUNDIE wrote:
Sun Jul 14, 2019 3:34 am
anoop wrote:
Sun Jul 14, 2019 12:54 am
it means the company is now being run by bean counters and they will milk it for it's worth.
CurlyDave wrote:
Sun Jul 14, 2019 1:12 am
One sure-fire sign the company has become a cash cow is when most of the high level new hires have MBA degrees.
As an MBA-toting bean counter, let me just point out the obvious, which is that investors who just purchased a company have every incentive to see their investment appreciate.

If OP’s job truly adds value to the company, he/she will be fine. If not, then it was only a matter of time anyway.
If the OP was in the business of innovation for building next-gen product and the company changes its focus to cost efficiency (because that is what bean counters excel at, without casting judgement on you personally), then while OP may have been useful to the company before the new investors came in, his role may now be questionable.
Cost cutting is only one lever to driving increased valuation, and not the preferred one. After all there is only so much cost you can cut.

Revenue growth, on the other hand, is theoretically unbounded. If the OP’s job was actually to “build next-gen product” that met a clear market need, then he/she will be fine.
Seriously, what do you think, given all your experience, has a higher probability?

My guess is cost cutting (increased offshoring if that is the industry they are in) + financial engineering.
If offshoring was in the cards it would have been done years ago.

I’m guessing you have never built a synergy model for an acquisition. Slashing operating expenses does not drive EBITDA growth in the long run, revenue growth does.

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Re: Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by samsoes » Sun Jul 14, 2019 6:17 am

HEDGEFUNDIE wrote:
Sun Jul 14, 2019 4:48 am
I’m guessing you have never built a synergy model
Sounds like something from a Dilbert comic. Wasn't the Pointy Haired Boss fond of such a model?
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Re: Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by DJP1944 » Sun Jul 14, 2019 6:43 am

Assuming your company is successful, my experience has always been that good employees thrive in these transactions. As someone else mentioned growth for sure trumps expense reduction. And,innovation can drive greater multiples.

Without knowing anything about you or your company I think the best advice I can give is not fear the unknown and to stay above all the chatter.

Good luck.

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Re: Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by tedgeorge » Sun Jul 14, 2019 6:50 am

I’ve worked at a company where new investors showed up and there were lots of changes. The investors were trying to correct some poor strategic decisions by the owners. Lots of early layoffs to try to shore up losses and to try and refocus strategy away from previous bad choices. The bean counters are not always wrong if management has been wasting resources.

Like what was said earlier, people adding value were retained. Those not adding value were let go. You may also see some targeted actions here too where expensive resources are let go to replace with cheaper ones.

I’m guessing you are not at a management level to know what is going on. I’d definitely be updating my resume so at least you are not caught flat footed.

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Re: Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by Watty » Sun Jul 14, 2019 7:44 am

IthinkICan wrote:
Sat Jul 13, 2019 8:23 pm
How often have you seen a company sale work out OK for employees of an acquired company?
One thing that has not been mentioned is the impact in part depends on what you do. For example when a company is bought they do not need two payroll departments so typically the people in the payroll department of the acquired company will be laid off as soon as possible. Lots of other positions will also be duplicates that will be eliminated. That is part of why the acquiring company plans to run more efficiently.

During a merger I once did a corporate relocation across the country from the old company HQ to the new HQ. That worked out ok for me but they eventually shut my old office and about 97% of the people there choose not to relocate and were laid off with a modest severance package.

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Re: Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by GreenGrowTheDollars » Sun Jul 14, 2019 8:49 am

DH's company was sold several weeks after he received a large bonus for outstanding performance. A week after the deal closed, he along with virutally all the other tech staff over 50 were laid off. The remaining folks had the job of teaching the outsource tech staff the business.

I'd get your resume polished up and start looking. Better to find a new job before the economy tanks, imo.

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Re: Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by IthinkICan » Sun Jul 14, 2019 9:34 am

OP here with a little more information.

The company is between 100-150 employees.
We have a presence in the US, EMEA, and India.
We are an IT consulting and managed services company that works with packaged apps, databases, and cloud.

I work across multiple roles - solution architecture, project lead, hands-on, and also help with presales environment scoping, presentations, and SOW drafting.

It's accurate to say that I'm not in management and don't have a clear picture of what's going on.

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Re: Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by HEDGEFUNDIE » Sun Jul 14, 2019 10:23 am

samsoes wrote:
Sun Jul 14, 2019 6:17 am
HEDGEFUNDIE wrote:
Sun Jul 14, 2019 4:48 am
I’m guessing you have never built a synergy model
Sounds like something from a Dilbert comic. Wasn't the Pointy Haired Boss fond of such a model?
And hence why the Pointy Haired Boss was the boss, and Dilbert was...Dilbert.

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Re: Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by HEDGEFUNDIE » Sun Jul 14, 2019 10:27 am

IthinkICan wrote:
Sun Jul 14, 2019 9:34 am
OP here with a little more information.

The company is between 100-150 employees.
We have a presence in the US, EMEA, and India.
We are an IT consulting and managed services company that works with packaged apps, databases, and cloud.

I work across multiple roles - solution architecture, project lead, hands-on, and also help with presales environment scoping, presentations, and SOW drafting.

It's accurate to say that I'm not in management and don't have a clear picture of what's going on.
Knowing this I would say you are 99% safe.

IT services companies rely on people to perform those services and to generate revenue (typically on an hourly basis). Laying off customer facing staff (such as yourself) would decrease revenue on 1:1 basis.

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Re: Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by samsoes » Sun Jul 14, 2019 11:01 am

HEDGEFUNDIE wrote:
Sun Jul 14, 2019 10:23 am
samsoes wrote:
Sun Jul 14, 2019 6:17 am
HEDGEFUNDIE wrote:
Sun Jul 14, 2019 4:48 am
I’m guessing you have never built a synergy model
Sounds like something from a Dilbert comic. Wasn't the Pointy Haired Boss fond of such a model?
And hence why the Pointy Haired Boss was the boss, and Dilbert was...Dilbert.
Wally is my Dilbert-strip hero.
"Happiness Is Not My Companion" - Gen. Gouverneur K. Warren. | (Avatar is the statue of Gen. Warren atop Little Round Top @ Gettysburg National Military Park.)

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Re: Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by CurlyDave » Mon Jul 15, 2019 12:13 am

HEDGEFUNDIE wrote:
Sun Jul 14, 2019 3:34 am

...As an MBA-toting bean counter, let me just point out the obvious, which is that investors who just purchased a company have every incentive to see their investment appreciate...
This is not necessarily true.

There are acquisitions where the new owners intend to merely milk the existing product lines for as long as they can without creating growth through new products. And, if the acquirers are already in a closely related business, they may see great value in transitioning existing customers to their own products.

A customer list is sometimes the most valuable asset a company has. And, the new investors may have motives which are not readily apparent to the employees of the acquired company.

As a product development guy with a fair number of patents, I used to do a lot of things which drove bean counters nuts. Fortunately, I ended up in the defense industry, where finding new, disruptive ways to drive other countries and their bean counters nuts was a valuable trait.

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Re: Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by HEDGEFUNDIE » Mon Jul 15, 2019 12:37 am

CurlyDave wrote:
Mon Jul 15, 2019 12:13 am
HEDGEFUNDIE wrote:
Sun Jul 14, 2019 3:34 am

...As an MBA-toting bean counter, let me just point out the obvious, which is that investors who just purchased a company have every incentive to see their investment appreciate...
This is not necessarily true.

There are acquisitions where the new owners intend to merely milk the existing product lines for as long as they can without creating growth through new products.
Revenue growth comes in any number of forms. Selling more existing product to your existing customers and finding new customers is the low hanging fruit. Creating and selling new products is probably the hardest. But that is true whether the company is acquired or not. “Milking existing product lines” should include picking the low hanging fruit, and if old management was not good at picking that fruit, then diverting resources from unproven new product development to pick that fruit will grow the value of the company. That is not necessarily a bad thing.
And, if the acquirers are already in a closely related business, they may see great value in transitioning existing customers to their own products.
“Buying customers” through M&A is probably the most expensive way to acquire customers. No bean counter worth his/her title should be able to justify an acquisition on this alone.
A customer list is sometimes the most valuable asset a company has.
Absolutely, but almost always the customer list is used to cross-sell those customers the acquirer’s product, not to replace one product with another. After all, that would be cannibalization of revenue, revenue that the acquirer just paid a premium for.
As a product development guy with a fair number of patents, I used to do a lot of things which drove bean counters nuts. Fortunately, I ended up in the defense industry, where finding new, disruptive ways to drive other countries and their bean counters nuts was a valuable trait.
Ironically the defense industry is probably the notorious poster child for non-economic business practices. When your main customer is the US government and your products are priced and purchased on a cost-plus basis, very little market logic filters through.
Last edited by HEDGEFUNDIE on Mon Jul 15, 2019 12:58 am, edited 1 time in total.

123
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Re: Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by 123 » Mon Jul 15, 2019 12:50 am

The positions most likely to be made redundant in an acquisition are those that duplicate those of the company doing the acquisition. Usually those are in areas like HR, accounting, finance, facilities. That said some acquisitions allow the company being acquired to continue to operate mostly independently.

A lot of it comes down to is the company being bought for its own merits (unique technology or products provided) or it is just being bought as a means to acquire its customer base (banks do this a lot). If the acquiring company just wants the customers it won't be long before before most of the employees are gone. They just keep the employees around long enough to transition the customers to the products/services of the acquiring company.
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Re: Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by CarpeDiem22 » Mon Jul 15, 2019 4:20 am

IthinkICan wrote:
Sat Jul 13, 2019 8:23 pm
It's been a crazy few weeks at work. Evidently our owners recently took on new investors. We've had a travel freeze for a couple of months, and layoffs over the last 2 weeks. The owners were visiting regional offices last week to evaluate and try to put people at ease (not sure that worked). We had been focusing on growth the last coupe of years, but the focus now seems to only be on corporate valuation. I think that's why they went through a sudden "right sizing" exercise. Is it reasonable to think that they are looking to sell?

How often have you seen a company sale work out OK for employees of an acquired company? They said they really want me to stay, but I have to admit that I feel anxious.
Here's my diagnosis: You company faced a cash crunch and owners could not take on more debt (either because they already had enough debt or they did not qualify). So they raised more equity funding from new investors and now the new investors have the right to participate in how the business is run. The reason for travel freeze and layoffs was cash crunch (some travel is necessary for business and no investor will block that). It may also be possible that new funding from equity investors is not yet raised, and owners are trying to build in as much efficiency as possible (which can be extrapolated to future to get good valuations) before the funds are raised. If you are not a very high cost resource and participate in revenue generation, you should be okay. Acquisition is usually dangerous for support functions like Finance and HR since they don't generate revenue and are often duplicate in merging entities.

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Re: Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by Sconie » Mon Jul 15, 2019 4:42 am

123 wrote:
Mon Jul 15, 2019 12:50 am
The positions most likely to be made redundant in an acquisition are those that duplicate those of the company doing the acquisition. Usually those are in areas like HR, accounting, finance, facilities. That said some acquisitions allow the company being acquired to continue to operate mostly independently.

A lot of it comes down to is the company being bought for its own merits (unique technology or products provided) or it is just being bought as a means to acquire its customer base (banks do this a lot). If the acquiring company just wants the customers it won't be long before before most of the employees are gone. They just keep the employees around long enough to transition the customers to the products/services of the acquiring company.
Reading this thread make me wonder-----is what has occurred actually an "acquisition" or some type or kind of a merger with another organization----or merely the existing owners taking-on new, additional, investors? I'm prone to think it is the latter event. Unless I'm mistaken, OP never indicated that the company was bought-out by a competitor or otherwise "sold." Rather, my understanding is that he/she indicated that the organization "took on new investors."
I know you think you understand what you thought I said but I'm not sure you realize that what you heard is not what I meant. - Alan Greenspan

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Re: Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by Sconie » Mon Jul 15, 2019 5:03 am

HEDGEFUNDIE wrote:
Sun Jul 14, 2019 3:34 am

If OP’s job truly adds value to the company, he/she will be fine. If not, then it was only a matter of time anyway.
Absolutely! The bottom line is that if the management----and by implication, the ownership-----of the company can make more money by keeping you than by letting you go, you're going to stay. At the end of the day, everyone in an organization is there to: 1) Make money; 2) Save money; 3) Solve problems, and/or 4) To prevent problems----or some combination thereof. That's what it is all about.
I know you think you understand what you thought I said but I'm not sure you realize that what you heard is not what I meant. - Alan Greenspan

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Re: Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by Grt2bOutdoors » Mon Jul 15, 2019 5:33 am

CurlyDave wrote:
Sun Jul 14, 2019 1:12 am
anoop wrote:
Sun Jul 14, 2019 12:54 am

...Based on what you say about layoffs and the travel freeze it means the company is now being run by bean counters and they will milk it for it's worth. Whether this is good for employees depends on many factors. Sometimes, they will offer some lucrative packages to keep key employees during the milking phase. In general, they will tend to lose their top talent (if they haven't already) so the company really won't go anywhere.
I agree.

One sure-fire sign the company has become a cash cow is when most of the high level new hires have MBA degrees.

It makes a lot of sense to dust off your resume and keep your contacts current. Even if you don't end up moving you might get a better sense of your real value.

With today's hot economy and low unemployment, right now might be the best possible time to look for another position.
Also agree. Dust off the resume and start looking.

Here are the signs of worse things to come:
Owners unable to borrow from bank.
Owners take on new investors (private equity/loan shark). Loan shark has a bunch of inexperienced overpaid young turks milling around fresh out of school and no real world experience.
Loan shark demands immediate upfront return on money “invested”.
Company begins “right sizing” after it finds it needs money to pay the “sharks”.
Word gets around through grapevine that reduction in force is in full effect. Remaining workforce get restless.
Management visits offices to proclaim “all is well”, we want you to stay. Old owners cash out completely.
The next thing to go will be a cut in benefits. It only gets worse from there.


Look. Start looking right now.
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Re: Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by CurlyDave » Mon Jul 15, 2019 10:33 am

HEDGEFUNDIE wrote:
Mon Jul 15, 2019 12:37 am

...Revenue growth comes in any number of forms. Selling more existing product to your existing customers and finding new customers is the low hanging fruit. Creating and selling new products is probably the hardest. But that is true whether the company is acquired or not. “Milking existing product lines” should include picking the low hanging fruit, and if old management was not good at picking that fruit, then diverting resources from unproven new product development to pick that fruit will grow the value of the company. That is not necessarily a bad thing...
If MBAs had existed in the 1800s the industrial revolution would have never happened.
...Ironically the defense industry is probably the notorious poster child for non-economic business practices. When your main customer is the US government and your products are priced and purchased on a cost-plus basis, very little market logic filters through...
The history of the world is that every nation pays for defense.

You can pay now, in gold, or
you can pay later, in blood.

Many bean counters have great difficulty with the relative values of those currencies.

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Re: Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by Grt2bOutdoors » Mon Jul 15, 2019 12:21 pm

HEDGEFUNDIE wrote:
Sun Jul 14, 2019 3:34 am
anoop wrote:
Sun Jul 14, 2019 12:54 am
it means the company is now being run by bean counters and they will milk it for it's worth.
CurlyDave wrote:
Sun Jul 14, 2019 1:12 am
One sure-fire sign the company has become a cash cow is when most of the high level new hires have MBA degrees.
As an MBA-toting bean counter, let me just point out the obvious, which is that investors who just purchased a company have every incentive to see their investment appreciate.

If OP’s job truly adds value to the company, he/she will be fine. If not, then it was only a matter of time anyway.
And who is the one who determines that measure of value? The bean counter who doesn’t have a clue how the business operates? Get rid of the bean counters and you’ll find many more businesses with a heck of a lot less in risk. Penny wise, pound foolish.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

Grt2bOutdoors
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Re: Recent layoffs and now focus on corporate valuation - are owners looking to sell?

Post by Grt2bOutdoors » Mon Jul 15, 2019 12:24 pm

CurlyDave wrote:
Mon Jul 15, 2019 10:33 am
HEDGEFUNDIE wrote:
Mon Jul 15, 2019 12:37 am

...Revenue growth comes in any number of forms. Selling more existing product to your existing customers and finding new customers is the low hanging fruit. Creating and selling new products is probably the hardest. But that is true whether the company is acquired or not. “Milking existing product lines” should include picking the low hanging fruit, and if old management was not good at picking that fruit, then diverting resources from unproven new product development to pick that fruit will grow the value of the company. That is not necessarily a bad thing...
If MBAs had existed in the 1800s the industrial revolution would have never happened.
...Ironically the defense industry is probably the notorious poster child for non-economic business practices. When your main customer is the US government and your products are priced and purchased on a cost-plus basis, very little market logic filters through...
The history of the world is that every nation pays for defense.

You can pay now, in gold, or
you can pay later, in blood.

Many bean counters have great difficulty with the relative values of those currencies.
+1. I hold an MBA, but totally agree with you. Running a business is more than just numbers. No school is going to teach you that, you either know it or you don’t. Those who do know it, have the ultimate competitive advantage.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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