Private Equity: Levered on Capital or Labour?

Sukhdev Johal, Peter Folkman, Julie Froud, Karel Williams

Research output: Contribution to journalArticlepeer-review


This article argues that, during the 2002—7 conjuncture, private equity was levered on capital, not labour. During this period of rapid up-scaling the sources of the gains were variable and included financial engineering and windfall trading gains. In general terms, the favourable conditions of cheap and available debt meant that restructuring at the expense of employment conditions was not a necessary, or even important, part of all private equity deals. The first half of the article reviews the narrative and numbers on the employment effects of private equity, highlighting the counter claims of different narrative positions and the heterogeneous nature of the evidence. The second part of the article presents an alternative view of private equity, arguing that the change in conjuncture after the credit crunch that began in 2007 will mean that different sources of gain become more important.
Original languageEnglish
Pages (from-to)517-527
Number of pages11
JournalJournal of Industrial Relations
Issue number4
Publication statusPublished - 2009


  • Financial intermediaries
  • Private equity

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