Author Topic: How to handle a mass layoff?  (Read 2517 times)

tawyer

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How to handle a mass layoff?
« on: August 01, 2018, 09:36:51 PM »
My company announced it is restructuring and there will be layoffs in a couple of weeks. I have no reason to believe that I am indispensable. What should I be doing to prepare?

I am FI and had intended to RE in about 18 months. I can expect some severance. There was a call for volunteers for the layoff. I am considering bringing up part time with my boss, but I'm wondering how best to do so. I'm also wondering if I have any leverage in negotiating a better severance.

Please, fellow Mustachians, share your experiences.

terran

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Re: How to handle a mass layoff?
« Reply #1 on: August 02, 2018, 05:00:20 AM »
The usual recommendation would be to build up your emergency fund, but since you're FI you already have the ultimate emergency fund. So, I guess sit back, relax, try to spin this to your advantage as best you can, and remember to maintain empathy for your coworkers who are probably in a much tighter spot than you are.

You might find this helpful: https://www.financialsamurai.com/how-to-engineer-your-layoff-make-a-small-fortune-by-saying-goodbye/ (edit: sorry, giant sales pitch. Here's free content by the author on the topic: https://www.financialsamurai.com/?s=layoff)

I imagine they must be offering something to volunteers? My impression is that volunteers usually make out better than those who wait it out and end up getting laid off anyway.
« Last Edit: August 02, 2018, 11:44:40 AM by terran »

mbl

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Re: How to handle a mass layoff?
« Reply #2 on: August 02, 2018, 05:47:47 AM »
My company announced it is restructuring and there will be layoffs in a couple of weeks. I have no reason to believe that I am indispensable. What should I be doing to prepare?

I am FI and had intended to RE in about 18 months. I can expect some severance. There was a call for volunteers for the layoff. I am considering bringing up part time with my boss, but I'm wondering how best to do so. I'm also wondering if I have any leverage in negotiating a better severance.

Please, fellow Mustachians, share your experiences.

What leverage do you believe you would have with a company that is cutting back?
What are you going to do, threaten to leave?
Other than volunteering and perhaps getting the better severance agreement?

thd7t

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Re: How to handle a mass layoff?
« Reply #3 on: August 02, 2018, 06:44:22 AM »
My company announced it is restructuring and there will be layoffs in a couple of weeks. I have no reason to believe that I am indispensable. What should I be doing to prepare?

I am FI and had intended to RE in about 18 months. I can expect some severance. There was a call for volunteers for the layoff. I am considering bringing up part time with my boss, but I'm wondering how best to do so. I'm also wondering if I have any leverage in negotiating a better severance.

Please, fellow Mustachians, share your experiences.

What leverage do you believe you would have with a company that is cutting back?
What are you going to do, threaten to leave?
Other than volunteering and perhaps getting the better severance agreement?
The leverage might come by waiting a little bit and then volunteering.  If you're FI, you are able to go.  You have something they want.  I'd say that volunteering to go is a good idea, but not doing it immediately gives you a little potential advantage.

tawyer

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Re: How to handle a mass layoff?
« Reply #4 on: August 02, 2018, 06:46:00 AM »
You might find this helpful: https://www.financialsamurai.com/how-to-engineer-your-layoff-make-a-small-fortune-by-saying-goodbye/
Thanks. This suggests to me that there are levers available in negotiating, but I was hoping to find out if anyone here has experience in this before I spend $140 on the book.

frugaliknowit

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Re: How to handle a mass layoff?
« Reply #5 on: August 02, 2018, 08:18:02 AM »
I don't think you (or anyone else) has much leverage.

If they have trouble getting enough volunteers, then approach you, I think you might have leverage in the amount of severance you would accept.  For example, if they offer you 3 months, you might be able to get more out of them...

mbl

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Re: How to handle a mass layoff?
« Reply #6 on: August 02, 2018, 08:47:48 AM »
I don't think you (or anyone else) has much leverage.

If they have trouble getting enough volunteers, then approach you, I think you might have leverage in the amount of severance you would accept.  For example, if they offer you 3 months, you might be able to get more out of them...

If you don't accept the severance amount, why would they be motivated to give you more?
Why? 

Plugging Along

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Re: How to handle a mass layoff?
« Reply #7 on: August 02, 2018, 09:07:29 AM »
I don’t know the laws in the US but in Canada you are often entitled to more than what the basic minimum is based on years of severance, age, etc.    The best way in Canada to negotiate a better severance is to get a lawyer.  You may want to see if there is a lawyer that will offer you a free consult. 

Don’t sign anything TIL you have the lawyer gl through it.  That’s about the best negotiating point you will have.

FireHiker

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Re: How to handle a mass layoff?
« Reply #8 on: August 02, 2018, 10:47:41 AM »
Years ago I was part of a layoff. I learned it was best to be in the first wave (which I was, along with all of engineering). We got a MUCH better package than the rounds that came later.

mxt0133

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Re: How to handle a mass layoff?
« Reply #9 on: August 02, 2018, 10:49:33 AM »
In my experience severance packages normally get worse not better in later rounds.  If a company has to go through multiple rounds that normally means things are getting worse and not better financially so

If I were in your position I would talk to your boss and and volunteer depending on the severance package.  If the severance package is not what you expect then you can take your chances and see if you can make it to your 18 month FIRE date.

GuitarStv

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Re: How to handle a mass layoff?
« Reply #10 on: August 02, 2018, 10:59:59 AM »
Volunteer for the layoff!

freeat57

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Re: How to handle a mass layoff?
« Reply #11 on: August 02, 2018, 11:28:35 AM »
This happened to me in 2010.  I was working for a well-known megacorp in the USA.  The layoff packages (severance) were very carefully structured according to the employee handbook and were inflexible as far as $ was concerned.  For instance, my last day of work was about two weeks prior to my 20th anniversary.  The difference in severance pay for 19 vs 20 years service was about $12K.  I got the 19 years amount.  No room for negotiation at all.  They had revised the severance section of the handbook a few months before announcing the layoff (hint, hint).  They were very concerned about being sued, so they could not grant special packages or exceptions for certain people.  The corp did ask for volunteers and some who did so were turned down.  If volunteering got anything for the folks who were allowed to do so, it was in terms of better treatment in regards to how they finished up their work and how they were treated on a personal basis by management and remaining coworkers.  Some people were asked not to return to their work areas as soon as the announcement was made. 

I was FI at the time and found that my most fulfilling role was to support, encourage and help my coworkers who were totally screwed by the situation.  My boss was completely baffled that I high-fived him when I signed my separation agreement! 

terran

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Re: How to handle a mass layoff?
« Reply #12 on: August 02, 2018, 11:43:52 AM »
You might find this helpful: https://www.financialsamurai.com/how-to-engineer-your-layoff-make-a-small-fortune-by-saying-goodbye/
Thanks. This suggests to me that there are levers available in negotiating, but I was hoping to find out if anyone here has experience in this before I spend $140 on the book.

Oh crap, I'm sorry. I didn't realize it was a giant sales pitch. I really thought I had read actual content from him on the topic before so grabbed the first google result from his site without looking again. Searching his site results in some free content on the topic: https://www.financialsamurai.com/?s=layoff

dcheesi

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Re: How to handle a mass layoff?
« Reply #13 on: August 02, 2018, 12:06:10 PM »
If you're FI now, then I would take this as a blessing! It's the perfect kick in the pants to help you escape from One More Year syndrome. Volunteer, and start enjoying the fruits of your labor!

Also, Volunteering for the layoff is the humane thing to do for your coworkers, who may not be in the same financial position. Certainly if I had such a short timeline to RE, I wouldn't want to sit there and watch someone else get let go in my place. Even in the best case scenario where that other person gets rehired to fill my void 18 months hence, the disruption of their life in the meantime would be an unnecessary hardship for them, whereas a slightly earlier retirement isn't likely to bother me much :)

markbike528CBX

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Re: How to handle a mass layoff?
« Reply #14 on: August 02, 2018, 01:43:43 PM »
If you're FI now, then I would take this as a blessing! It's the perfect kick in the pants to help you escape from One More Year syndrome. Volunteer, and start enjoying the fruits of your labor!

Also, Volunteering for the layoff is the humane thing to do for your coworkers, who may not be in the same financial position. Certainly if I had such a short timeline to RE, I wouldn't want to sit there and watch someone else get let go in my place. Even in the best case scenario where that other person gets rehired to fill my void 18 months hence, the disruption of their life in the meantime would be an unnecessary hardship for them, whereas a slightly earlier retirement isn't likely to bother me much :)
I nearly volunteered for a layoff with ~18 months to my actual FIRE date, but that wasn't an option.   
The earlier ( think volunteer) you go the more likely the severance is better.   The last person kicked to the curb won't get squat.

Catbert

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Re: How to handle a mass layoff?
« Reply #15 on: August 02, 2018, 01:45:52 PM »
The larger the company is, the less flexibility there will be regarding severance.  If there is a union involved forget flexibility.

TrMama

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Re: How to handle a mass layoff?
« Reply #16 on: August 02, 2018, 02:28:52 PM »
Why wouldn't you volunteer? I worked for a company that had multiple rounds of layoffs. Coming into work the day after 30% of your coworkers were let go was incredibly depressing. No way would I want to do that again.

You can try to negotiate for more money, or you could try to negotiate to have your last day be sooner, rather than later. This might work better and you could avoid all the drama involved with having to spend any more time at a dying company.

MandalayVA

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Re: How to handle a mass layoff?
« Reply #17 on: August 02, 2018, 02:40:39 PM »
As someone who was involved in a mass layoff, if it asks for volunteers and you're FI TAKE IT.  Although technically I didn't volunteer, the original agreement ran out June 1, 2017.  When extensions were offered, I didn't sign, and I left on June first.  The last of my department didn't leave until late September, and by all accounts it was awful.  By then I was living the dream in Florida.  :D

the_fixer

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Re: How to handle a mass layoff?
« Reply #18 on: August 06, 2018, 05:41:26 PM »
I worked for a megacorp as well and each round of layoffs received less and less.

The people that went early got the best deal 1 month per year you were with the company with a 8 week min and the final round people were given  2 weeks TOTAL

If I were FI and RE on my radar I would raise my hand. Even if you do not get a beeltter severace it sucks in the office when that is going on I lived that way for 5 years of every few months another round of layoffs.

Not sure about now days but people that were laid off we're allowed to take some courses to reskill and even get unemployment.

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Hargrove

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Re: How to handle a mass layoff?
« Reply #19 on: August 06, 2018, 06:29:29 PM »
I knew someone who left Megacorp during a restructuring and he went and asked for the severance. They said but Bill, we're not laying you off. He said you are, right now, and with a sweet severance, or I will work so little that by the time HR finally catches up to me 6 months from now, having covered their asses with improvement plans and coaching meetings, and all those profits and productivity wasted, you'll wish you had, and I'll save the difference doing it.

They gave him the package.

Peachtea

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Re: How to handle a mass layoff?
« Reply #20 on: August 06, 2018, 06:34:40 PM »
I don't think you (or anyone else) has much leverage.

If they have trouble getting enough volunteers, then approach you, I think you might have leverage in the amount of severance you would accept.  For example, if they offer you 3 months, you might be able to get more out of them...

If you don't accept the severance amount, why would they be motivated to give you more?
Why?

Depending on the state, taking a severance could disqualify the employee from unemployment. The more people who leave voluntarily, the less people filing for unemployment. Employers’ unemployment insurance premiums are in part based on on their “experience” rating. If they have high turnover of people filing for (and being approved for) UI, then their premiums go up. So if they pay a bit more now one time for people to go voluntarily, they save going forward on UI premiums.

Also, there are other “soft” reasons to incentivize volunteers. Such as it looks better for the company to have less “involuntary lay offs” when reported in the news.