Aren't these buyout offers the worst way to trim headcount? The people most likely to take them are the ones who are good at their job, and confident of landing another one at a different company. The people least likely to take them are the mediocre ones who know they'll never land an equally good position elsewhere. If you want to keep your best people, this seems like the exact opposite way to do it.
Many times the offers are a thinly-veiled attempt to get rid of their older (more expensive) employees. People nearing retirement age are most likely to have many years of service, making a severance package that pays per tenure especially appealing. And there’s the threat of layoffs if you don’t accept the offer. If you’re in your 50s or 60s it’s hard to get a new job regardless of how qualified you are, so this makes gambling on your continued employment risky.
My mother went through this exact exercise two years ago. Management was clear that, if not enough employees took the buyout, they would start layoffs with less generous terms. From previous rounds of layoffs she knew older employees were the first to go, so she took the buyout and got 52 weeks paid severance.
The day she resigned, she received a termination letter offering only 40 weeks. Fortunately the company stood by the more generous offer. But it took her the better part of a year to get a new job, and it pays much less than the one she invested 30+ years in. She’s from a generation when you worked at a single company for life, but companies don’t operate like that any more.
Almost the exact same thing happened to one of my family members too. 50 year old programmer with a decade+ tenure at a large corporation. 52 weeks severance retirement offer. It took a year to find a new job and only now, almost a decade later, is he above his old salary.
If the company is laying people off en masse, your "best people" are going to start looking for other jobs anyway unless they have faith in the company leadership.
Off the top of my head, a couple of ways offers help in that respect:
Buyout offers soften the blow ahead of involuntary layoffs. They give people a sense of agency, which improves morale at a time when it's likely to be low.
Offers give people time to plan. Even if they don't take the offer, they'll have an idea of the numbers the company is looking to lose.
Offers help spread out the impact of layoffs. Laying off a large number of staff at once can cause organizational chaos; laying off a large number of staff over a span of weeks casts a pall over everything until the layoffs are over. Having people leave voluntarily gives time for an orderly transition without causing as much dread.
For highly compensated people very close to retirement age (which is probably who they are targeting), 60 weeks pay is a mighty fine way to walk out. A non-compete tied to the industry probably dissuades the younger competent people from jumping ship
They aren’t necessarily trimming headcount. They’re replacing them with Indian workers on H1B visas from Infosys. However, quality will decrease tremendously.
I don’t know how Verizon is doing it but sometimes the offers are structured so that they exclude “essential employees”, ie anyone they like. So, if you get the offer it’s a sign they think you’re not any good :-p
Companies throw a wide net in these matters to prevent lawsuits, such as age discrimination lawsuits. But then more managed process takes over on the individual level.
> The incentive includes three weeks’ pay for every year of service, thanks in part to profit-enhancing benefits from new corporate tax laws.
I genuinely had to check whether this was some kind of a parody site. "Corporate tax cuts are great, companies can now afford to give bigger severance packages!"
I'd read that as, "The investor class has not quite yet internalized regarding the recent tax changes as their god-given birthright, so at the moment they don't squeal quite so loudly when the proles get a nickel."
They use the term manager for lots of roles that don't actually have any management function. I worked on a team within Verizon that had ~40 people, all of whom were considered managers, even though none of us, other than the two actual managers, had any people under us.
I work at AT&T. “Manager” here means, basically, “not unionized” - so basically not technicians, call center agents, or retail store workers. “Supervisor” is the term of art for “has people under them”.
Yeah, I worked at a public school district where everybody who was neither hourly, nor a teacher, nor someone high in administration qualifies as a "manager". Pretty much the entire IT team was coded as a manager. It really just meant "salaried, 12-month, no overtime, non-instructional employee". Outside IT most of the people actually did manage people, though.
Is this a tax thing? I've seen this at a few big old guard
software companies. It confused the hell out of me coming from startups and seeing the guys next to me were all VPs/Managers (in the Engineering aisles).
I'm your run of the mill srSWE just like them, they'd just been around 5-15 years. I've been non-exempt my entire career as a neteng/syseng/swe, etc. Do you mean something else? I assumed it was something like X amount of mgrs/VPs on staff = some benefit (taxes, etc).
For those who may not know, companies do this so they can classify as many workers as possible as "exempt employees" meaning they are exempt from overtime pay and other worker protections.
"In general, to be considered an “exempt” employee, you must be paid a salary (not hourly) and must perform executive, administrative or professional duties."
To be honest, I'm a little surprised that these employees couldn't be considered administrative or professional without a managerial title.
Edit: reading further, this clarifies a bit: "These categories are purposefully broad to encompass many types of jobs. However, it is the tasks performed on the job, not the job title alone, which determine exempt vs. non-exempt employment status." Essentially, it's not entirely a cop-out by companies to avoid worker protections.
This is emphatically the case. The administrative and IT exemptions are rankly abused. It's not only big / tech companies that engage in this practice, either -- so many folks work for middling-or-less salary and expected to put in uncompensated overtime. Companies craft HR policy to shoehorn practically every full-time position into an exempt class.
Had a friend at a yuuuge company (comparable to Verizon) and their title changed as they spent more time with the company w/o their role or responsibilities changing a lot throughout the years.
After 7-8 years at the given company this friend of mine became a "VP" and first I was "WOW, look at you!", but then he explained that he is doing the same sh*t, maybe a tad bit more, but this is how they get their promotions, etc... so they had tons of "Managers" and "VPs"...
I started my career as a programmer at AT&T and was "management" on day one, despite no managerial responsibilities. The term means nothing more than "non-union employee."
and 44,000 managers qualify for the buyout. Let's assume that 100% of managers qualify, so they only have 44k managers. What am I missing in corp America? 1 in 3-4 is a manager?
In past decade Verizon had been rapidly reducing workforce: 224K to 153K. The 44K new cut is massive 29%. So net shedding over a decade is almost 48%. From the look of the graph, the shading had been at constant rate. This short of indicates that the problem isn't over-hiring (which they could have fixed by one time layoffs) but rather attempt to increase stock by risking long term prospects. AT&T for comparison has over 254K employees. I'm now bit worried about verizon's long term future. I have been planning to switch to Verizon from AT&T and now this doesn't give me comfort.
My heart wasn't in this job or profession, but I do thank Verizon immensely for being a great company to work for and treating their employees very well!
