Post-Merger Restructuring of the Labor Force

We study the restructuring of the labor force after M&As. Net employment declines moderately, increasing labor productivity of the merged firm. Employee turnover is much larger than net changes in employment because employees leave at double the rate at which jobs are reduced. Acquirers' establishments grow significantly as many jobs - but only few employees - move from the target to the acquirer. To fill reallocated positions, acquirers mostly rely on external hires. Managers are transferred between targets and acquirers to integrate operational knowledge and managerial skills. Overall, we find that post-merger restructuring creates synergies at the cost of high employee turnover.