Companies bought by private equity groups typically go through a period of intensive restructuring in the hands of their new owners, with the aim of turning these companies into healthier businesses. Critics, however, argue that private equity firms pursue their goals in a rather ruthless way: cutting costs by cutting jobs. Indeed, this has become a popular view not just in the United States but also in Europe—private equity firms are accused of being unconcerned about the people whose jobs are destroyed after a buyout.
[This article has been reproduced with permission from Capital Ideas, the research journal of University of Chicago's Booth School of Business http://www.chicagobooth.edu/capideas/ ]