As a business owner, you’re always looking for ways to expand your reach and improve your company. Recently, you’ve been talking to other local business owners, and you’re considering a merger. You and another business owner think that you would both be more successful if you were working together, so merging the companies may be the best course for long-term business growth.
There are many different things to consider while going through this process, one of which is just how you’re going to handle your employees. Many times, layoffs are necessary after a merger, so some employees may lose their jobs. This can be a delicate process, so you need to know exactly what steps to take – when to notify employees, how to select the employees who will be laid off, and much more. But why is it that those layoffs are going to be necessary in the first place?
A problem of redundancy
Often, the issue is just that you’re going to have a redundant workforce. Many employees will stay as the two businesses merge into one, performing unique duties and helping the company move forward. But there are also employees who may have overlapping roles or positions, and some of them will need to be terminated.
For example, perhaps these are two small businesses, and both of them have a social media manager to run their online accounts. After the merger, there is only going to be one online account. The second social media manager is redundant, so one of them will be let go. This basic principle is often applied to accounting departments, HR departments, line workers and many others.
Layoffs are just one of the potential complications you will encounter during a merger. Take the time to consider your legal options carefully.