Private equity occurs when a group of investors sees more potential in a company or asset than its current market valuation. Their goal is to acquire it, implement strategic changes (there are many well-documented playbooks on this—another topic for another time), and ultimately sell it for a profit.
Over the last 20 years, the number of private equity-backed companies has grown from 2,000 to 11,500 [CitizensBank], meaning an estimated 1 in 10 American workers has experienced a private equity acquisition (my estimate: approximately 1,000 employees per company out of 128 million working-age adults). Many private equity playbooks (though not all) focus on profitability: optimizing operations, increasing automation, rightsizing management, and cutting underperforming investments. This is often a painful process for employees, and many—if not most—would likely consider it one of the most stressful times of their lives.
- For the PE firm, time is money—along with their investors' money, reputation, and overall success.
- For employees, it’s their livelihood, their friends (who often feel like family), and the culture they’ve helped build.
I recently went through a private equity acquisition as a senior manager at a tech company. I survived the layoffs and saw firsthand how it impacted the company and its people. Based on my experience, the actions coming out of the Executive Branch today feel eerily similar to America undergoing its own private equity-style acquisition. Whether you agree or disagree with their approach, here are 10 parallels between what’s happening in America right now and my experience with private equity.
1️⃣ Layoffs, layoffs and more layoffs
Private equity is notorious for using layoffs as a cost-cutting measure. The new administration appears to be following a similar playbook, making workforce reductions its primary tool for cutting expenses—and this is likely just the beginning.
When my last employer was acquired by private equity, the company went through three rounds of layoffs.
- The first round targeted roles that were deemed unnecessary in the short term—mostly the recruiting team, since hiring had effectively stopped.
- The second round was framed as a departmental restructuring, eliminating nearly 10% of the workforce.
- The third round gave affected employees six months to transition their work before leaving. They were offered severance packages if they completed their critical tasks, met certain requirements (usually re-location), or finished a knowledge transfer.
Planning these layoffs for our 6,800-person company took months. Senior leaders walked the halls visibly anxious, bracing for the fallout. Meanwhile, employees endured weeks of uncertainty—wondering whether they, their teams, or their closest colleagues would be next.
The administration appears to be making large-scale cuts with less strategic planning. Meanwhile, federal employees are left in limbo—awaiting legal rulings, severance terms, and the next phase of restructuring.
2️⃣ Leadership is under pressure to make change fast
The new administration may have only until the midterms before potentially losing control of Congress. Like a private equity firm racing against its investment horizon, leadership is pushing rapid policy shifts to lock in changes before political headwinds slow momentum.
I wasn’t in the rooms behind closed doors with the Board and PE advisors post-acquisition, but at NewCo, our President emerged with an aggressive—and arguably unrealistic—deadline to meet nearly impossible targets.
The administration is attempting to implement four years’ worth of change within its first year—before court challenges and midterm politics can stall progress.
3️⃣ Things will break, it’s intentional
(whether you agree or disagree, it's the playbook)
When my prior employer was acquired, I initially assumed the PE firm would invest heavily in automation before making workforce reductions. I quickly realized that wasn’t their approach. Instead, the playbook called for deep cuts first—seeing what breaks, and only then deciding whether to restore functions or patch gaps with automation.
Many are alarmed by the breakneck pace of change. 'It’s too fast.' 'They’re breaking everything.' But in many ways, that’s the strategy—whether one agrees with it or not. Researchers and universities relying on NIH and NSF funding, USAID’s foreign relief programs, and the Department of Education are all experiencing their own private equity-style restructuring.
4️⃣ Analysts are running around grabbing data
Private equity firms often bring in analysts and consultants, particularly when Limited Partners (LPs) have an outsized stake in the deal. In my case, a pension fund that served as a Limited Partner in the investment sent analysts into the company. These analysts, despite having no official authority, began setting up meetings with me and my team—requesting data, documentation, and anything else they deemed relevant. Their role was clear: ensure the Limited Partner saw a strong return and provide recommendations to the General Partners overseeing the private equity fund.
This mirrors what we’re seeing today with Elon Musk’s influence—where analysts are collecting vast amounts of data and delivering insights directly to him. Regardless of their official authority, leadership (e.g., the White House) often defers, saying, 'Give them what they want.' Whether legal or not, the situation feels eerily similar to the private equity playbook I witnessed firsthand.
5️⃣ New “advisors” have no real power, but have very real influence
"New 'advisors' emerge—individuals who hold no formal power but wield significant influence. During my private equity acquisition, certain advisors seemed to materialize overnight. Despite having no formal role in the organization, they quickly became key voices in decision-making. I would frequently hear directly from a President or Vice President, 'Well, [name] said...' or '[name] will never agree to that,' even though these advisors weren’t officially in charge of anything."
Like Elon Musk and Donald Trump, influence isn’t tied to an official title. Musk holds no formal government authority, yet his influence is undeniable—sparking debates over whether he should even have the access and power he does. Nonetheless, it mirrors the dynamics of a private equity takeover.
6️⃣ The company finds new ways to make money
Not every private equity playbook focuses on growth, but many include a revenue expansion strategy. Like my former company, these firms must find new revenue streams—either by expanding their customer base or extracting more from existing clients. At my company, this meant rolling out a mandatory migration to a new subscription plan, requiring every customer to switch—no exceptions. Along with the change came higher prices across the board.
The U.S. government is following a similar strategy. Tariffs are being imposed across industries and nations to generate new revenue streams. Much like in private equity, the focus is on uncovering new ways to boost revenue—as long as it helps meet their goals.
7️⃣ It’s extremely painful for almost everyone
Not everyone is laid off in a private equity acquisition—its very painful for those laid off. But for those who remain, the experience is painful still. Colleagues they built their careers alongside—sharing daily coffee breaks and hallway conversations—are suddenly gone. With fewer people, processes break, critical work stalls, projects cancelled and workloads spiral out of control. Frustration builds as employees wonder if another wave of layoffs is just around the corner.
This experience is no longer unique to private equity—now federal employees, grantees, and their families are facing similar uncertainty. For my company, nearly 6,800 employees—and their families—were directly impacted. Today, that pain extends to 3 million government employees and their families, along with millions more who depend on $148 billion in federal grant funding—including public schools, universities, and researchers [$48B - NIH, $10B - NSF, $90B - Dept of Ed].
Even President Trump and Elon Musk have publicly acknowledged the widespread 'pain' and 'hardship' these changes would cause.
8️⃣ Culture shock is a reality that doesn’t shake easily
A private equity acquisition transforms a company’s culture—often drastically. At my tech company, we had cultivated a fun, upbeat, and innovative environment. But that changed quickly in different stages:
- Fear-driven paralysis: Anxiety over layoffs sets in, draining morale and productivity—after all, why go the extra mile if you might not have a job next month?
- Loss of autonomy: Where you once felt empowered to make decisions and innovate, you’re now at the mercy of a rigid new regime that stifles creative problem-solving.
- Post-layoff overwhelm: Those who remain face crushing workloads. Critical functions break, but leadership expects business as usual—many feel like they’re being asked to squeeze water from a rock.
- A singular new focus: Financial results. For many, this replaces their passion for cynicism, as the focus on 'return on investment' becomes more important than their original mission.
Many Americans are now experiencing this firsthand. Some feel betrayed, believing the cause they swore to uphold is being sacrificed for financial gain. Others see it as a purge, leaving only the most loyal in place. Either way, the culture shock—whether in government or private equity—is real and lasting. Once altered, workplace culture rarely returns to what it was before.
9️⃣ The Ripple Effects Extend Far Beyond the Organization
At my former company, layoffs and stalled investments didn’t just affect employees—they sent rippled through our entire ecosystem:
- Vendors took a hit as we slashed spending on contracts and services.
- Travel budgets were eliminated, hurting local hotels and airlines that relied on our business.
- Customers suffered, facing slower service or losing long-standing account representatives.
- Families of employees struggled, scrambling to find alternatives for healthcare, childcare, and other lost benefits.
- Local economies felt the pain, as job losses led to reduced consumer spending and economic slowdown.
This isn’t just a private equity phenomenon. The same dynamic is playing out across America as government spending cuts ripple through industries, affecting businesses, workers, and entire communities. With $6.7 trillion in government expenditures—over 23% of the U.S. economy—the stakes are enormous.
🔟 Some people just put their heads down and work through it
Not everyone reacts to a private equity takeover the same way. Some fight, some leave, but others simply put their heads down and keep going.
At my company, there were those who accepted the new reality and focused on what they could control. They felt the culture shift, saw the layoffs, and endured the uncertainty, but they chose to keep working—whether out of necessity, loyalty, or sheer resilience.
Many Americans are doing the same today. Some are actively protesting the changes in government policies, while others have disengaged entirely. But a significant portion of the workforce is simply pressing forward, focusing on their day-to-day responsibilities and adapting as best they can. Whether by choice or necessity, they continue to work in an environment that looks drastically different from before.
The bottom line:
Everyone is getting a bit of a Private Equity acquisition-like experience
Many people are experiencing the fear of the unknown—fear of layoffs, fear of losing government-funded grants or contracts, fear of losing their colleagues, and fear of being unable to keep up with the relentless pace of change.
This is America’s chance to understand what it feels like to be part of a private equity portfolio company. Right or wrong, whether you support or oppose it, these rapid transformations come with real-world consequences. The “short-term pain” often promised by restructuring advocates has profound, lasting effects.
The question on many minds now is: Is this the right direction for the country? Academic studies on private equity suggest mixed results, depending on the timeline and types of funds analyzed. However, research often shows that PE returns (net of fees and risk) exceed market performance by 4.8% [NBER] to 20% [CAIA]—a substantial win for investors.
What’s rarely calculated in those returns is the human toll—the intangible impact on people and communities that may take years (or decades for America’s case) to fully understand.
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