Post-merger Restructuring of the Labor Force

We study the restructuring of the labor force after M&As by taking a comprehensive view that analyzes targets, acquirers, and merged firms. We show that acquirers’ establishments grow significantly as many jobs move from the target to the acquirer. Employee turnover is large because many employees leave the merged firm voluntarily, and vacant positions at the acquirer are filled with external hires. Restructuring involves significant changes to the management and the organization of the firm. These findings highlight that redrawing the boundaries of the firm has also first-order consequences for the organization and composition of the labor force of the acquirer.