This article develops a firm-level analysis of how the quality of employment relations following acquisition by private equity firms (PEFs) is contingent upon the strategic intent of those firms and the post-acquisition organizational choices they make. The efficiency gains that PEFs seek in acquired companies are expected to encourage restructuring towards a minimalist organization. However, the form such an organization takes is seen to depend on whether PEF strategy is oriented primarily towards extracting short-term value from acquired assets rather than towards renewing and developing those assets. Contrasts in the process of restructuring and in organizational form associated with these two strategies will have different implications for the quality of employment relations. The way in which PEFs restructure the companies or units they acquire is the key intervening factor between the strategic intent of PEFs and impact they have on the quality of employment relations. © The Author(s) 2010.