Mergers Range From Very Large To Tiny Firms Joining Of Companies Brings A Lot Of Baggage For Workers

As Wall Street traders scrambled last month for ways to spin the nation’s largest-ever bank merger into gold, executives at Noah’s New York Bagels sat back and relaxed. Their deal was done.

One day earlier, the 37-store chain agreed to be bought by Einstein Bros. Bagels, a larger purveyor of the chewy breakfast staple.

Compared with Wells Fargo bank’s $11.6 billion purchase of First Interstate, the bagel deal was a nosh. But for Noah’s and Einstein, the $100 million transaction was a meal in itself.

“The complexity of it is really astounding,” says Glenn Bacheller, Noah’s chief executive. “For something a hundred times that size, it’s hard to imagine what the details would be.”

Bacheller isn’t the only one scratching his head. Executives at little-known companies have been doing mergers by the fistful, deals small enough to escape most public notice. Their significance, however, belies their size. Together, these mom and pop mergers are reshaping America.

Anyone who sat down and munched a bagel with newspaper in hand last year could scarcely escape noticing the surge in corporate mergers. In fact, 1995 was a record year with 9,008 trips down the aisle - almost quadrupling the number seen in 1985.

But beneath the high-profile, big-bucks deals like Walt Disney’s purchase of Capital Cities/ABC were a multitude of smaller combinations - the vast majority of mergers, in fact. The average 1995 deal cost $51 million, according to Securities Data Co., which tabulates such things. Cap Cities sold for about $19 billion.

For working folks, the proliferation of smaller deals means the merger craze may be coming to a workplace near you. That’s because Americans in increasing numbers are employed by small and midsize companies.

“What it says is more and more people are going to encounter the experience once or twice in their careers of changing employers without changing jobs,” says Dwight L. Gertz, an author and consultant at Mercer Management Consulting.

That can bring with it the threat of layoff - or at the very least a new boss, different responsibilities and an otherwise changing workplace. If things aren’t going too well such change may not be bad, but who wants to mess with a good thing?

First, mergers and layoffs. The two have come hand-in-hand as many companies see combinations as a way to boost sales while cutting people. Smaller mergers, as well as the big-ticket variety, have taken this approach.

The Wells Fargo-First Interstate marriage is expected to cost thousands of jobs. For smaller mergers, the numbers are proportional.

“Your job’s at risk because merged companies look for ways to eliminate duplication,” says John A. Challenger, executive vice president at Challenger, Gray & Christmas, a Chicago job-search firm.

Of all the layoffs reported last year, 16 percent were due to mergers, Challenger calculates. Merger-related layoffs totaled 72,083.

Even those who keep their jobs can be assured of some additional stress. A new boss is always a dicey proposition, with accomplished workers forced to prove themselves all over again. There’s also bound to be a new corporate culture, an amorphous concept that can make work fun or hellish.