Private equity risks

Private equity-owned companies employ millions of workers in the United States, and the number continues to grow as private equity firms are acquiring additional companies at a record pace.

The largest number of workers employed by private equity-owned companies are concentrated in industries where employers often pay low wages – at least 1.5 million workers in Food Service, 1.1 million workers in Retail, and almost 1 million in both Security and Health Care. For example, in December 2020, Roark Capital acquired Dunkin’ Donuts, bringing the total number of workers at its companies or franchisees to almost 1 million.

Earlier this year, the Warburg Pincus-owned Allied Universal Security acquired G4S and now has over 800,000 workers globally. In the last year and a half, Apollo Global Management has almost doubled the number of employees at its companies to over 550,000 through acquisitions such as its buyout of Alorica, a call center operator with 100,000 workers, and Michael’s craft stores with 45,000 workers. Private equity takeovers often result in significant job losses and decreases in average worker wages at the companies they buy. Private equity-owned retail companies have laid off hundreds of thousands of workers due to store closures and bankruptcies.

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