Demoting a common cost strategy for tech acquisitions

Question

A friend works at a company that was acquired and the entire staff was demoted in title by the acquiring company.I am curious if others have had any similar experiences in acquisitions, advice, and why an acquiring team would demote the entire acquired company staff for morale reasons when acquiring IP and engineering talent? Does this signal anything about the acquiring company ethics or am I reading too much into it?

giantg2 · Accepted Answer

It depends on a lot of factors not given here. Retitling is pretty common from what I hear. You want to align the employees from the acquisition with the structure and pay scales of the acquiring company. It's kind of like how I could be considered a senior developer at one company and only a midlevel at another, but be paid the same. It does sound a little suspect that everyone was demoted though.The equity is tough. I don't see anything that jumps out as necessarily bad.