Recently, major corporations such as General Motors, Verizon and Pfizer have announced employee buyouts for the end of this year. These buyouts illustrate the emotional and financial considerations that accompany their decision to enter severance agreements.
This year, companies ended 46,100 jobs in this country through voluntary severance. Voluntary severance was related to almost 10.5 percent of job cuts in 2018, which was the highest ever recorded. This rate was only 1.15 percent in 2017.
The first thing to consider is whether you are mentally prepared to stop working. On the positive side, the country is now experiencing a relatively low unemployment rate, which provides a positive economic and professional atmosphere for searching for a new job.
Reducing the workforce and costs is stressful to workers who are considering staying with their employers and worry that they may be terminated. For example, GM said that it would re-evaluate layoffs in 2018 if an insufficient number of employees accept voluntary severance.
Buyouts have other emotional impacts on workers. They often feel that they are being sacrificed for younger and cheaper workers even though they gave years of dedication and service to their employers.
A person’s financial situation is also very important. Employees who were planning on retiring in the near future may benefit from a severance package. However, a person may be entitled to a larger pension, better health or other benefits by working for a few more months. Entering a premature agreement may reduce these benefits.
Workers may have some advantages in negotiating these agreements and seeking a better severance package. An experienced attorney may provide guidance and help draft a fair and equitable package that incorporates these needs and addresses other matters, such as job placement or using company assets.