Post-Merger Restructuring of the Labor Force

99 Pages Posted: 5 May 2021 Last revised: 22 Jan 2022

See all articles by Britta Gehrke

Britta Gehrke

University of Rostock - Faculty of Business Administration, Economics and Social Sciences; Government of the Federal Republic of Germany - Institute for Employment Research (IAB); IZA Institute of Labor Economics

Ernst G. Maug

University of Mannheim Business School; European Corporate Governance Institute (ECGI)

Stefan Obernberger

Erasmus University Rotterdam - Erasmus School of Economics; Erasmus Research Institute of Management (ERIM)

Christoph Schneider

University of Münster - Finance Center Münster

Multiple version iconThere are 2 versions of this paper

Date Written: January 20, 2022

Abstract

We study the restructuring of the labor force after M&As. Restructuring is large. Net employment of targets declines by half within two years after acquisitions relative to matching firms. Employee turnover increases, particularly for managers, and jobs migrate to acquirers. Acquirers have a better-educated, better-paid, and more qualified workforce than targets. Acquirers hire new employees who are younger and less expensive. Mergers create internal labor markets. However, most hiring is external, especially for managers. Our results are consistent with a framework in which acquirers seek business opportunities from targets and provide the organizational and managerial capacity to produce more efficiently.

Keywords: M&A, Restructuring, Employment, Internal Labor Markets

JEL Classification: G30, G34, J24, J31, M51

Suggested Citation

Gehrke, Britta and Maug, Ernst G. and Obernberger, Stefan and Schneider, Christoph, Post-Merger Restructuring of the Labor Force (January 20, 2022). European Corporate Governance Institute – Finance Working Paper No. 753/2021, Available at SSRN: https://ssrn.com/abstract=3838865 or http://dx.doi.org/10.2139/ssrn.3838865

Britta Gehrke

University of Rostock - Faculty of Business Administration, Economics and Social Sciences ( email )

Ulmenstr. 69
Rostock, 18057
Germany

Government of the Federal Republic of Germany - Institute for Employment Research (IAB)

Regensburger Str. 104
Nuremberg, 90478
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Ernst G. Maug (Contact Author)

University of Mannheim Business School ( email )

L9, 1-2
Mannheim, 68131
Germany
+49 621 181-1952 (Phone)

HOME PAGE: http://cf.bwl.uni-mannheim.de/de/people/maug/

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Stefan Obernberger

Erasmus University Rotterdam - Erasmus School of Economics ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Christoph Schneider

University of Münster - Finance Center Münster ( email )

Universitätsstraße 14-16
Münster, 48143
Germany

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