July 31, 2001

3:48 PM

Scient and iXL Merge...and I'm wondering who thinks this is a really good idea. A big part of the problem these "iBusiness" consultancies have is that they're too big. Remember all those layoffs? It's in large part because of big overhead, which is a big problem in a tight market. So what problem is being solved by making these two companies into one bigger company?
posted by peterme (14 comments total)

More cash, and one less competitor.

I'm no business expert, but I think mergers happen a lot at the tail end of an economic boom.
posted by jragon at 3:51 PM on July 31, 2001

Mergers are very hard to pull off. This could end up breaking them both... (The Change Monster, which I'm currently reading, certainly makes me cringe at this news by highlighting so many things that could go wrong in that situation.)
posted by annekef at 4:03 PM on July 31, 2001

i have only two words: march first. or wait, was that one word? marchfirst? anyway. yes. that.
posted by judith at 4:06 PM on July 31, 2001

Good riddance to iXL.
posted by BoatMeme at 4:12 PM on July 31, 2001

So what problem is being solved by making these two companies into one bigger company?

Employee payroll. for one.
posted by holgate at 4:17 PM on July 31, 2001

So what problem is being solved by making these two companies into one bigger company?

The head of iXL said it himself in the conference call. "You just can't keep cutting staff. There is a floor. Together, there is additional possibilities for streamlining."

In other words, as a single company they can lay off way more people than they could as two separate companies.
posted by mourning-glory at 4:18 PM on July 31, 2001

Look at it more as a merger of account lists - the combined company will have a bigger Fortune 500 penetration - which is the name of the game if you want to compete with Accenture/CGE&Y/KPMG/Delloite, etc. It's not good news for employees, as there probably will be more layoffs (that's the "synergy" benefits - they both do the same thing, so by combining they can cut of a bit more redundancy).
posted by dchase at 4:19 PM on July 31, 2001

Reminds me of a line in Roger & Me - the Sheriff who does the evictions in Flynt is talking about a couple who got married, and is now evicted. Neither of them, apparently, was employed. He says of the marriage something like:

"Neither of them has any money - why'd they gonna get married?
Poor plus poor is just poor"

((if anyone knows the actual quote from R&Me please post it here!))
posted by artlung at 7:16 PM on July 31, 2001

Blech. Another depressing sign that all of the lead-headed idiots haven't been shaken out of the Internet Tree yet. I feel for those poor employees...
posted by theNonsuch at 8:43 PM on July 31, 2001

"I feel for those poor employees..."

I think there's been enough time and inspection of the internet services sector for every employee and potential employee of that sector to know EXACTLY what they're in for when they work for those kinds of companies. I don't think much sympathy is in order, personally.
posted by gen at 7:19 AM on August 1, 2001

...clarify for me, gen; which part renders those people ineligible for sympathy? the fact that they have been sticking with their employers even in troubled times? the fact that any of them could be *the* most highly skilled employee in the company yet still be not immune to layoffs? the fact that there's noplace else for them to go within the industry because *everyone* from the big guys on down to the little shops is laying off staff? the fact that they've been to this point unwilling to abandon the entire industry in favor of beginning a new and lucrative career in family-dining food service?

I wouldn't accept a new job offer from iXL tomorrow for anything, but the people who are there now because they've *been* there for a long time are in a bad place.
posted by Sapphireblue at 7:28 AM on August 1, 2001

Did anyone score with this on fucked company? This has got to be worth a few points to someone.
posted by briank at 7:36 AM on August 1, 2001

This could end up breaking them both...

They were already both broken. The merger is just a last ditch effort to salvage something out of the wreckage. Without a merger, both companies would have closed. With the merger, my guess is they will probably close anyway... but at least they get one more bite at the apple.
posted by spilon at 10:22 AM on August 1, 2001

this merger gives me a chance to invoke my favorite m&a mantra: tying two rocks together doesn't make them float.
posted by mmanning at 10:41 AM on August 1, 2001