Post-merger Restructuring of the Labor Force

Post-merger Restructuring of the Labor Force

Britta Gehrke, Ernst Maug, Stefan Obernberger, Christoph Schneider

Series number :

Serial Number: 

Date posted :

April 21 2021

Last revised :

May 05 2021
SSRN Share


  • M&A • 
  • restructuring • 
  • Employment • 
  • Internal Labor Markets.

We study the restructuring of the labor force after mergers and acquisitions. Overall restructuring is large. Net employment of targets declines by more than half within two years after acquisitions relative to a matched sample, and is concentrated in targets that close all establishments.

There is a substantial increase in employee turnover, which is larger if the merging partners have a more similar workforce. Growth and turnover are both higher for managers. Acquirers have a better-educated, better-paid, and more qualified workforce than targets. Newly-hired workers are much younger and less expensive. Firms become more hierarchical if they grow and if they become more diversified. Mergers create internal labor markets, which are more active if firms have more managerial capacities. However, most hiring is external, especially for managers. We interpret our findings within a framework in which acquirers seek growth options from targets and provide managerial capabilities to organize production more efficiently.


Real name:
Britta Gehrke
Real name:
Stefan Obernberger
Real name:
Christoph Schneider
Tilburg University