I’ve been involved in engineering several lay-off for the companies I’ve worked for. Not my favorite part of my old job, but hopefully my experience will help here. I just recently designed my own lay-off.
There are two common myths, managers are idiots and there is no rhyme or reason to who gets laid off.
First, in big mega corps there are always dud managers, all in all most senior people have skill sets that serve the company well, or customers. Most good supervisors/managers keep around cannon fodder. I know I did it. Every year you had to save X% so best way to do it is remove a head. That’s why you see a pattern in layoffs. But during the course of the year I’d always get the high achievers complaining about Bob in the corner. Then a few months later Bob would be gone and we’d all get raises, accounting to less than Bob’s salary. Heartless but true.
Second, unless it is a small company there is a very well thought out way to who gets laid off. There are so many legal hoops to jump through it’s got to be done right. Typically there is a grid ranking system at a minimum. For white collar salaried workers there really is no recourse, we’re all at will workers. The severance is done for a few reasons. 1. Face savings for EE and the Company. EE get something the company doesn’t seem like as big a dick. 2. The EE by signing the paperwork essentially gives up any ability to sue. Of course they could sue but, but they’d lose if they sign. 3. Managers get laid off as well, so they want to establish a baseline for their future compensation. 4. If the company is public or owned by Private Equity- there are some accounting things that can be done to keep the restructuring costs out of earnings, so it becomes a one time fee. This helps with earnings per share or valuations for PE companies.
As for getting a severance without there being a lay-off in the example by the OP. I see absolutely no way I’d give a mediocre person that is potentially my cannon-fodder a severance ever. The abbreviated conversation would be,
Employee: blah blah blah i might quit if you’d give me a severance.
Me: did you just resign?
Employee: yes if you give me a severance.
Me: overly nice, your goodbye party will be in two weeks, it’s been great working with you, thanks for all of the hard work.
In my experience the best people, including me are the ones that put themselves on the list. Most of the time they’re the ones you keep.
What I personally just did after I was FI. I’m a partner in the business and WAS a senior VP. I had a tremendously honest conversation with the CEO about my intentions. At the end I gave 4 options that I was good with.
1. This was my two week notice.
2. I’ll stay another 8 weeks while my replacement was found, but I get 6 months severance.
3. I’ll drop back to 2 weeks per month for 12 months and take half my salary.
4. I’ll be a consultant on reserve. You pay me 150% of my salary for 3 months and I won’t look for another job and I’ll be on call. Anything past 8 weeks of work in the first year you pay me 180% of my weekly salary. This is normal in executive consulting.
They chose a modified version of 2 and 3. We’re all happy. The bottom line, you’ve got to be flexible and way better than the average employee to get a severance when you’re not being asked to go.