Crossroads in my career

[chicago81]

I've been working at the same company a little over 8 years. Started working here straight out of college. I mostly like working here. It is a relaxed and laid back environment with flexible hours. There is a free company gym and a lot of good perks and benefits of the job. It pays well too. I also like being able to drive to work in about 20 minutes within the city. Employees here are free to be creative and innovative -- and it has paid off in a big way in terms of the great products that have been developed in recent years.
At my current rate of expenditures and savings and income, I am probably 7 or 8 years away from being completely FI. My job seemed fairly stable in that: 1) I am good at my job, 2) I am well respected by my coworkers 3) the company is making money and seems to be doing great -- slow and steady, but no explosive growth at the moment 4) The company has a pristine balance sheet, with tangible assets far in excess of liabilities.
I am at a crossroads, however. There was recently an announcement that has a big impact on how stable I view my job.
I was recently informed that an offer had been made for another company to acquire my employer. I am worried because the new company does not seem to be on as firm financial footing. Some of the things concerning to me are:

- The company acquiring my employer has a smaller market capitalization than my employer

- They are borrowing money to essentially do a leveraged buy-out of my employer

- The company acquiring my employer does not look to have a very strong balance sheet in my opinion. Their assets are only slightly higher than their liabilities. Furthermore, their balance sheet's assets include a huge line item for the intangible asset "Goodwill" (which, incidentally, is almost as high as the entire market cap of the company acquiring my employer!)

- The company making the acquisition appears to have lost money in the last 4 years.

- Most companies that are trying to attract great talent will try to woo new employees with details about benefits and perks -- usually provided on job listings, or at least on their website. However, this new company does not provide any such information. My co-workers and myself are completely in the dark about what our benefit packages will look like when the deal closes.
Although the recent acquisition announcement has really boosted the value of my holding of shares of my employer, it is bitter-sweet because I know that real (and possibly/probably negative?) changes are likely coming down the pipe. I am thinking of starting to polish up my resume.
If anyone can add advice or can share about their similar experiences, I would gladly read it.
Cheers

[mikeBOS]

I'd stay aware of my options but wouldn't make any moves based on speculation or rumors or even what management tells you they plan on doing in the future, since often times those new ideas flop and everything just falls back to the status quo. I've seen people take transfers, move their families hundreds of miles because management said there were going to be layoffs, but people who transferred would be safe. So about a month after a couple of dozen people uprooted their whole lives and relocated their families hundreds of miles management announced there wouldn't be any layoffs after all! And you hear stories all the time of people quitting for another job and then finding out if they had just stayed another 2 weeks they were going to be let go with 6 months of severance pay and benefits or whatever.

[chenda]

I agree, there is no need to start worrying about possible changes in the future. I'm inferring from your post you have a high savings rate and some marketable skills, which are your best defence against any future uncertainty.

[Ego]

It may be prudent to prepare for the possibility that the changes may not be to your liking. Get your resume together. Refresh the interview outfits. Update your profile on Linkedin. Mention to trusted friends in the industry that you are looking. Maybe even apply for a few jobs just for practice.
Right now you have a great job so you can look at the whole process as an adventure. That outlook will change very quickly if things go south with your company.
It is always easier to get a job when you don't need one.

[George the original one]

"- The company making the acquisition appears to have lost money in the last 4 years."
This is the single biggest negative that I see. There are few companies that can pull up out of slumps (or startup slowness) like that. The second biggest negative is that _your_ firm is shopping around for a buyer... why would they do that for what appears to be a short term gain?
Get your resume ready, maybe do some interviews for the practice, but don't make a move until it's time. Company takeovers fall through all the time.

[m741]

Why not clean up your resume and start interviewing? Maybe you'll find a job that offers more, or which you like more. At the very least, you re-evaluate your salary and get some interview experience.

[dot_com_vet]

The company's motive is profit. Yours should be too.
I'd recommend observing things play out and go with your gut feeling. It will likely be correct.
You could be laid off, or just as easily promoted. I've seen both happen in similar situations.

[DutchGirl]

You say you have shares in the company you work for, and that their value has gone up. Maybe now is the time to sell them. If the new management screws up the company, shares will not hesitate to drop down. I hear some people say that you shouldn't have a significant number of shares of the company you work for, with the reason that if something goes wrong with the company, you lose both your job and your savings... Better to spread your risks.

[Jen10]

I agree that you should wait and see on your job, although it is never too early to see what your options are elsewhere. The shares on the other hand, I agree with DutchGirl that you might want to sell all or part of them (if you're allowed to right now) because of the future volatility and to spread the risk.
My previous company went through 5 mergers/acquisitions and I kept my job and improved my standing through all of them (but I also lost almost all the value in about $20,000 worth of stocks). But every situation is different and it could easily have gone the other way.

[Chad]

Stay until you know more because it sounds like you found a great place.
I was part of one major company that was sold and we either had to move to Houston or take a severence package. No way I'm moving to Houston (all sprawl and humidity), so I left. I'm not entirely sure what happened to the people that moved, but a year or two later another company bought the merged company. I imagine they were either let go or moved again. Leaving was a good call on my part, but I only left after it all went down and got paid.
The mostly likely "bad" option is layoffs with severance in your position. Not a terrible option for someone in a solid financial position. Refresh the resume, make sure you have good interview clothes, research current opentings to make sure there seems to be demand for you, etc., but don't rush out the door.

[thebbqguy]

I have worked 17 years for a company that has been in down sizing mode for 15 years. I have prospered during that time. many of my friends who left the company because they didn't want to relocate or grew nervous had to start over with a new company and they lost most of their salary and basically had to start over.

[chicago81]

Here is an update:

The acquisition is going to be finalized this month.

Last month I was given my annual bonus, which included about $5k in cash, and some restricted stock units that will convert to restricted shares of the new company. (To get these RSU's, I had to sign a non-compete agreement for 1 year. The agreement also mentioned that all of the RSU's would vest immediately if my service to the company was terminated by the company without "cause".... Otherwise, they vest over 2 years. Today it is worth about $14K.)

Several of my co-workers have moved on to other companies in the past couple months.

Last week, some of my coworkers and I got ahold of the power-point-slides that the acquiring company was using in a presentation to one of their creditors for the LBO. Included were some slides entitled "Highly Achievable Cost Synergies" which were to be fully implemented with 12 months. Additionally, the slides outlined plans to outsource much of Product Development (the department in which I work.)

I am coming to the realization that I do not have a long-term (or possibly even a medium-term) future with this company. But I am still torn between trying to find another job ASAP, or if I should "ride it out".

If I were to stay and wait for them to lay me off, some positives are:

- Collect my current rate of salary & benefits in the meantime (which are pretty good)
- My ~ $14K of "restricted stock units" would vest to me immediately when I am finally laid off
- I might get severance (or maybe not, who knows....) If there is severance, and the amount is dependent upon the "number of years of service", I have over 9 years, so that could be good...
- I would be eligible for unemployment benefits, which in Illinois would give me $413/wk (which would cover all of my living expenses.)
- Unemployment benefits could last 25 weeks, and then there are some benefits called "EUC" Emergency Unemployment Compensation, which could extend the unemployment benefits for many more weeks

However, the biggest negative is:

- If I am applying for a development position at another company, I believe it is much easier to get a job offer (and at a higher salary offer) if I am already employed somewhere else.


I still don't know what I'm going to do. I am leaning toward "riding it out" at this point...

[Chad]

My initial thought is to start a serious job search. The purchasing company is poorly run based on the the loses before the purchase, the "up-market" purchase of a larger company (trying to buy growth), and the idiotic move of shifting product development overseas (talk about being behind the curve). These appear to be Wall Street managers and not real high quality industry managers. I'm suggesting they are managing for short-term stock price gain/company valuation instead of long-term.

This does not bode well for the long-term prospects of your company.

The non-compete for the stock units is them just trying to make their lives easier. Be careful of stuff like this. It is designed to be in their benefit, not yours.

However, if you don't have a lot to risk (kids, etc.) and have a project/idea you have always wanted to try, staying might be the best option. You may get the chance to do it, while collecting stock, severance (possibly), and unemployment.

However, the biggest negative is:

- If I am applying for a development position at another company, I believe it is much easier to get a job offer (and at a higher salary offer) if I am already employed somewhere else.

This is true. Even if it is stupid.

[chicago81]

I'm in a pretty good financial position. I have no debt and no children.

I own two condo units in my building (without any mortgage). I live in one of the units, and I earn rental income from the other. After all rental expenses, the unit nets me about $500/mo (which is then subject to income taxes.) I also have about $147K invested in dividend paying stocks in an individual brokerage account. Retirement account balances are $27K in a Roth IRA and $154K in a 401(k).

Excluding expenses related to the rental property (which is profitable), I've been spending around $2000/month lately, but I could easily pare that down to around $1500/month.

I think this could be a good opportunity to take a break from working, and "practice" the ERE lifestyle for a while. I could focus on learning some new skills and learn some new technologies. The problem is: The longer I stay out of the work-force, the more "stale" my contacts in the area become, and I am less likely to find future employment through "knowing other people."

[jennypenny]

I think this could be a good opportunity to take a break from working, and "practice" the ERE lifestyle for a while.

Why does it have to be practice? If you decide to ride it out, could you move to cheaper digs and rent out both condos for income? If you could lower your expenses to $1500/month and clear $1000/month from the condos, you would only need an additional $500. If you get severance and unemployment, you could bank a lot of it to bolster your brokerage account that has the dividend-paying stocks. If you could get your brokerage account up to $200K, a 3% yield from dividend stocks would cover the additional $500/month.

[GandK]

No way would I stay put under those circumstances, but I'm a security junkie.

I think this could be a good opportunity to take a break from working, and "practice" the ERE lifestyle for a while. I could focus on learning some new skills and learn some new technologies. The problem is: The longer I stay out of the work-force, the more "stale" my contacts in the area become, and I am less likely to find future employment through "knowing other people."

Is there any possibility of your doing part-time contract work (perhaps from home) for a while? That might be a compromise. You'd gain way more control over your time and environment, but still be earning an income and moving yourself toward ERE. And your skills would stay sharp, and your job history would have no gaps.