Intuit’s Acquisition of Mailchimp: How Did Employees Do?

If there is one thing the technology industry likes to do, it is probably patting each other on the back.

Company founders become celebrities. Raising capital to run a business is celebrated, and many lionize “exits,” or liquidity events in the form of an initial public offering on a stock exchange or a completed merger or acquisition.

But mergers and acquisitions can be an emotional rollercoaster, especially for everyday professionals who are not privy to the deal-making process.

Let us take a recent example: On Nov. 1, 2021, Intuit completed its acquisition of marketing platform Mailchimp in a $12-billion deal split between cash and stock. With the blockbuster total, you would expect Mailchimp’s more than 1,200 employees to be celebrating; instead, many are fuming at the acquisition and the resulting changes.

Based on the Mailchimp experience, here is what employees might be able to expect when their company has been sold in a merger or acquisition.

What happens to employees after a company acquisition?

A company making an acquisition becomes the new owner of the target company. For example, as of Nov. 1, 2021, Intuit owns Mailchimp and has absorbed the marketing platform’s operations, including its customers, employees and more.

As a result of the acquisition, Mailchimp employees faced changes in policies for everything from their compensation and employee benefits to employment terms.

“A handful of people are losing total compensation,” Blind user KaleSimp, a verified Mailchimp employee, said in a discussion about the Intuit acquisition on the professional social network Blind. “Some engineers have been switch[ed] to hourly from salary too.”

Other Mailchimp professionals noted they would lose paid time off due to Intuit harmonizing or standardizing workplace policies with theirs.

“I’m losing PTO, perks, AND taking a modest pay cut,” reported Blind user dwSP88, a verified Mailchimp employee.

Another verified Mailchimp professional had a similar experience. Blind user TCfK47 added: “Also losing a week of PTO and over 10k in total compensation. I won’t be staying around for long.”

Other common changes for employees after a company acquisition might include changes to employee benefits, such as healthcare or retirement plans or company contributions offered.

“We’re loosing [sic] $3k in stipends, quarterly bonuses (10% generally) and we didn’t have to pay insurance premiums before. We also got around 30% [of] our salary annually that vested immediately which is how I bought my first home,” Blind user HdA27, a verified Mailchimp professional, told an Intuit employee who asked if Mailchimp’s benefits were better than Intuit’s.

Finally, the acquiring company may also reorganize teams, which can include personnel changes and layoffs if roles or teams are restructured or eliminated.

How much did Mailchimp employees make in the Intuit acquisition?

An acquiring company must purchase most or all of another company’s equity to gain control of that company. As a result, people who own the target company’s shares typically benefit.

Because professionals at technology companies often have stock options or other equity as part of their total compensation package, an acquisition can result in a big payday for many. However, this was not the case at Mailchimp because employees never received any company equity.

As an alternative, Mailchimp offered one-time cash bonuses to employees. According to Blind, Mailchimp employees earned a “transaction bonus” calculated by multiplying their salary with their tenure at the company in years and 12%.

A Mailchimp employee paid a $100,000 salary who had been at the company for two years before the acquisition may have received a one-time cash payout of $24,000, a far cry from the thousands or even millions of dollars they might have earned if they had equity.

Meanwhile, the Intuit acquisition minted at least two new billionaires: Mailchimp’s cofounders Ben Chestnut and Dan Kurzius.

“Vast majority of people are upset about the transaction bonuses,” Blind user KaleSimp said, noting both individual contributors and managers are frustrated.

“I think we’re more upset by our own leadership and the issues they’ve caused and have failed to address, and now the people who’ve done least of the work and caused most of the problems are benefitting from this acquisition.”

The bottom line

For professionals in the technology industry, where stock options and company equity are common, it is assumed that an acquisition will be one of the best things to happen. Mailchimp employees have found out firsthand this is not always the case.

After Intuit bought Mailchimp, many Mailchimp employees received one-time cash bonuses, which they believe to be too small. Additionally, many are upset at the changes in workplace policies and lost perks.