“There’s no way we’d not continue to invest”
Jensen Huang, the CEO of NVIDIA, has pledged to keep “every single employee” of Israel’s Mellanox following a $6.9 billion acquisition of the network hardware specialist.
Earlier this month it was confirmed that NVIDIA would purchase sought-after Mellanox for $6.9 billion, equating to $125/share in a deal.
Moving to allay fears that they will be job losses following the purchase, amid concern that there was overlap in some areas between the two companies, Huang said in Israel today: “There will be absolutely no layoffs. We’ll keep every single employee.”
According to a recent Mellanox investor relations overview [PDF] the company currently has roughly 2,500 employees (NVIDIA states 3000).
Pledging sustained investment, the NVIDIA boss added: “This company is renowned for its technical excellence. There’s no way we’d not continue to invest in it. Mellanox is one of a kind, it’s a treasure that can’t be rebuilt again.”
All Mellanox Jobs Are Safe, Focused on Talent
While visiting Mellanox’s headquarters in Yokniam, Huang said that the two companies are fully complementary and he sees no overlap in their operations. He clarified NVIDIA’s commitment to Mellanox’s current CEO Eyal Waldman stating that: “It’s our intention and my hopes that Eyal will lead Mellanox Israel for as long as he shall live.”
The comments come amid heightened awareness of the importance of retaining technical staff following a takeover. A recent PwC report which investigated company performance and value achieved following a merger or acquisition found that nearly 40 percent of buyers believe that the last company they acquired did not actually create any value for their own organisation.
PwC People in Deals Lead Sarah Moore commented in the report that: “Those looking to create value in their tech acquisition should plan not just for the potential cost of failing to retain tech talent, but incentivising the acquired talent to remain on-board and grow as part of the new organisation – rather than succumb to the temptation to jump ship predicated by the change in ownership.”
In their research they found that over 80 percent of the deals not only failed to create value, but actually lost a significant and measurable amount of value had also lost over 10 percent of the acquisitions key employees.
As Moore writes: “Let’s not forget, the technology being acquired as part of M&A is only as valuable as the people who go with it. These are the people who understand the technology, the people who created it; the people who live and breathe it.”