Volunteer to be laid off? [OP Update]

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
marcopolo
Posts: 2488
Joined: Sat Dec 03, 2016 10:22 am

Volunteer to be laid off? [OP Update]

Post by marcopolo » Sat Nov 18, 2017 9:44 am

[UPDATE:]I had the conversation with the CEO, then the rest of the senior management team, this week. It went better than I expected.
While it came as a bit of a surprise, everyone understood my desire to exit the company given the new direction it is taking.

The company has agreed to include me in the restructuring, but they want to couch it as me taking an early retirement package, so as not to spook some of the people that are staying on in the small group i manage. The changes will be announced next week.

In addition to the very generous severance package, they have asked me to stay on for a few months to help with the transition. They are giving me an additional retention bonus to commit to doing that. Unexpected, but i will take it! Also left the door open to the possibility for some consulting in the future.

Next decision is whether or not to look for another job to carry me to my planned retirement move, or just call it day and get a jump on early retirement. But, that is a discussion for another day.

Thanks again for all that provided their perspective, very helpful, as always.
:sharebeer




I am a senior level executive in a technology company. I have been with the company close to 2 decades, and have had a great career that i enjoy.
A few months ago we made a business decision to change focus from our main product line (somewhat slow growth) to a peripheral area (higher growth) in which i have no special experience, and very little interest. In the previous product line area, I am fairly well know as a leading technical expert in the industry.

Due to this change in focus, the company is doing some restructuring. We are planning a sizable layoff, followed by much smaller scale hiring in new area. The severance packages are relatively good.

The question on which i am seeking advice is whether or not i should volunteer to be laid off? There is some chance that I may be let go anyway, or that they may not honor my request. But, I am seriously considering making the request, and would like to see what the consensus is here regarding the wisdom of doing this.

I was planning on retiring in 15 months. If I am not laid of at this time, I will simply resign at that time. There is unlikely to be another opportunity to receive severance package between now and then. The severance package I would be entitled to would be just about the same amount of money that I would earn over the next 15 months. Also includes 12 months of paid COBRA. I may simply retire now, or possibly do some consulting work for the next year.

Seems like I end up in the same place financially (maybe a little better when you consider the time value of money), and i get the option to retire a year earlier. It will take a little mental adjustment, as I have been gearing up for a 2019 retirement for a while. But, think i can adapt to it pretty quickly.

Any reason not to do this?
Last edited by marcopolo on Wed Nov 29, 2017 6:05 pm, edited 3 times in total.
Once in a while you get shown the light, in the strangest of places if you look at it right.

User avatar
dm200
Posts: 22280
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: Volunteer to be laid off?

Post by dm200 » Sat Nov 18, 2017 9:50 am

marcopolo wrote:
Sat Nov 18, 2017 9:44 am
I am a senior level executive in a technology company. I have been with the company close to 2 decades, and have had a great career that i enjoy.
A few months ago we made a business decision to change focus from our main product line (somewhat slow growth) to a peripheral area (higher growth) in which i have no special experience, and very little interest. In the previous product line area, I am fairly well know as a leading technical expert in the industry.
Due to this change in focus, the company is doing some restructuring. We are planning a sizable layoff, followed by much smaller scale hiring in new area. The severance packages are relatively good.
The question on which i am seeking advice is whether or not i should volunteer to be laid off? There is some chance that I may be let go anyway, or that they may not honor my request. But, I am seriously considering making the request, and would like to see what the consensus is here regarding the wisdom of doing this.
I was planning on retiring in 15 months. If I am not laid of at this time, I will simply resign at that time. There is unlikely to be another opportunity to receive severance package between now and then. The severance package I would be entitled to would be just about the same amount of money that I would earn over the next 15 months. Also includes 12 months of paid COBRA. I may simply retire now, or possibly do some consulting work for the next year.
Seems like I end up in the same place financially (maybe a little better when you consider the time value of money), and i get the option to retire a year earlier. It will take a little mental adjustment, as I have been gearing up for a 2019 retirement for a while. But, think i can adapt to it pretty quickly.
Any reason not to do this?
Maybe, depending on circumstances, wait until financial incentives are (or may be) offered to folks being "downsized". Are these already decided and would you qualify?

Fifteen months is a short time.

User avatar
midareff
Posts: 6459
Joined: Mon Nov 29, 2010 10:43 am
Location: Biscayne Bay, South Florida

Re: Volunteer to be laid off?

Post by midareff » Sat Nov 18, 2017 9:52 am

My former employer went through some trying times and cut wages as well as meaningful layoffs for a few months. I had about 18 months left until my planned but unknown to them retirement. I offered to take a layoff with the accompanying frills and they laughed at me. I retired on my schedule 18 months later. I wish I had the 18 months back now but the resulting bull market was not in my crystal ball although my minimum number was intact at that time.

Good luck with it.

student
Posts: 4133
Joined: Fri Apr 03, 2015 6:58 am

Re: Volunteer to be laid off?

Post by student » Sat Nov 18, 2017 9:53 am

marcopolo wrote:
Sat Nov 18, 2017 9:44 am
I was planning on retiring in 15 months. If I am not laid of at this time, I will simply resign at that time. There is unlikely to be another opportunity to receive severance package between now and then. The severance package I would be entitled to would be just about the same amount of money that I would earn over the next 15 months. Also includes 12 months of paid COBRA. I may simply retire now, or possibly do some consulting work for the next year.
If you are sure that you will retire in 15 months anyway, I do not see any downside.

Topic Author
marcopolo
Posts: 2488
Joined: Sat Dec 03, 2016 10:22 am

Re: Volunteer to be laid off?

Post by marcopolo » Sat Nov 18, 2017 9:56 am

dm200 wrote:
Sat Nov 18, 2017 9:50 am


Maybe, depending on circumstances, wait until financial incentives are (or may be) offered to folks being "downsized". Are these already decided and would you qualify?

Fifteen months is a short time.
I have a predefined severance contract, so I know exactly what I would be entitled to. It includes 12 months salary, vesting and payout of ALL restricted stock, and 12 months of paid COBRA, and few smaller items. The vesting of the RSUs is pretty significant and would more than make up for the 3 months of missing pay, missing annual bonus, and missing 401k matching. What I am not sure of is if they would honor my request.
Once in a while you get shown the light, in the strangest of places if you look at it right.

neilpilot
Posts: 2838
Joined: Fri Dec 04, 2015 1:46 pm
Location: Memphis area

Re: Volunteer to be laid off?

Post by neilpilot » Sat Nov 18, 2017 10:12 am

marcopolo wrote:
Sat Nov 18, 2017 9:56 am
What I am not sure of is if they would honor my request.
So what's the downside if you request severance, and they don't honor your request?

In an unrelated manner, the company I retired from later decided to significantly downsize, and they offered a decent severance package. Long term employees were paid 12-18 months severance, in a lump sum. As I understand it, there can be a tax/expense benefit for a company that pays severance as a lump sum as opposed to a continuation of the normal pay period after severance.

Those that received their l;ump sum severance qualified for unemployment benefits the week following their payment. That added an additional $10-20k benefit in the form of unemployment payments for those that were severed. Keep that in mind, along with your overall tax situation, should you have the option to take severance as a lump sum.

Lynette
Posts: 1889
Joined: Sun Jul 27, 2014 9:47 am

Re: Volunteer to be laid off?

Post by Lynette » Sat Nov 18, 2017 10:16 am

I was at a Megacorp when a number of packages were offered. We were explicitly told we could not volunteer for a layoff. I was in a protected group that was not offered a package (IT database). I think that there are also legal requirements especially if it is a severance as HR has to prove it was not age discrimination etc. I haven't seen anyone whose request to be laid off was accepted but I was just a worker bee and not in management.

Topic Author
marcopolo
Posts: 2488
Joined: Sat Dec 03, 2016 10:22 am

Re: Volunteer to be laid off?

Post by marcopolo » Sat Nov 18, 2017 10:24 am

neilpilot wrote:
Sat Nov 18, 2017 10:12 am
marcopolo wrote:
Sat Nov 18, 2017 9:56 am
What I am not sure of is if they would honor my request.
So what's the downside if you request severance, and they don't honor your request?

In an unrelated manner, the company I retired from later decided to significantly downsize, and they offered a decent severance package. Long term employees were paid 12-18 months severance, in a lump sum. As I understand it, there can be a tax/expense benefit for a company that pays severance as a lump sum as opposed to a continuation of the normal pay period after severance.

Those that received their l;ump sum severance qualified for unemployment benefits the week following their payment. That added an additional $10-20k benefit in the form of unemployment payments for those that were severed. Keep that in mind, along with your overall tax situation, should you have the option to take severance as a lump sum.
That is a good question. I guess they question my commitment to the new direction of the company, and they would not be wrong. I have pretty strong relationships with the entire management team, so I think they are likely to honor the request. If not, i am pretty sure after a short period of possible discomfort, things would be OK. The worst case, they fire me? Then i get the severance anyway....

The severance will be paid out as lump sum in early 2018, so as not to create a bigger tax hit in 2017. I have to double check the rules in my state, by i am pretty sure i would not be eligible for unemployment benefits either way due to the size of the severance.
Once in a while you get shown the light, in the strangest of places if you look at it right.

mouses
Posts: 3905
Joined: Sat Oct 24, 2015 12:24 am

Re: Volunteer to be laid off?

Post by mouses » Sat Nov 18, 2017 10:31 am

I'm a little confused - if you resign now without being laid off, you get your contract's severance package? And if instead they agree to lay you off, you get the same amount of money? The only difference being that in the second case you may also get unemployment payments?

I am not sure the size of the severance makes you ineligible for unemployment payments. It is worth checking this out. I was surprised that receiving severance did not prevent unemployment payments for me. You do have to be looking for work while you receive payments, however. At least where I lived.

As to the note by another poster about age discrimination, I think that is wishful thinking. One of the times I was laid off, MegaCorp had to provide us with a chart of the age of laid off employees vs. the ones left, and they had laid off exactly the top of the age pyramid. We had to sign an agreement not to sue in order to get the severance package. All sorts of discrimination in employment exist and there is little that employees can do about it.
Last edited by mouses on Sat Nov 18, 2017 10:32 am, edited 1 time in total.

neilpilot
Posts: 2838
Joined: Fri Dec 04, 2015 1:46 pm
Location: Memphis area

Re: Volunteer to be laid off?

Post by neilpilot » Sat Nov 18, 2017 10:32 am

marcopolo wrote:
Sat Nov 18, 2017 10:24 am
neilpilot wrote:
Sat Nov 18, 2017 10:12 am
marcopolo wrote:
Sat Nov 18, 2017 9:56 am
What I am not sure of is if they would honor my request.
So what's the downside if you request severance, and they don't honor your request?

In an unrelated manner, the company I retired from later decided to significantly downsize, and they offered a decent severance package. Long term employees were paid 12-18 months severance, in a lump sum. As I understand it, there can be a tax/expense benefit for a company that pays severance as a lump sum as opposed to a continuation of the normal pay period after severance.

Those that received their l;ump sum severance qualified for unemployment benefits the week following their payment. That added an additional $10-20k benefit in the form of unemployment payments for those that were severed. Keep that in mind, along with your overall tax situation, should you have the option to take severance as a lump sum.
That is a good question. I guess they question my commitment to the new direction of the company, and they would not be wrong. I have pretty strong relationships with the entire management team, so I think they are likely to honor the request. If not, i am pretty sure after a short period of possible discomfort, things would be OK. The worst case, they fire me? Then i get the severance anyway....

The severance will be paid out as lump sum in early 2018, so as not to create a bigger tax hit in 2017. I have to double check the rules in my state, by i am pretty sure i would not be eligible for unemployment benefits either way due to the size of the severance.
The company I left has employees that live in 3 states, and I can tell you that severed employees qualified for unemployment in all 3 states. I know that in at least one of those states, the amount of the severance had no effect on qualifying. The state simply needed to know that the former employee was no longer receiving pay (continued health benefits were not a factor), they had not yet started to receive retirement benefits from that company, and that they were willing an able to look for work.

User avatar
dm200
Posts: 22280
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: Volunteer to be laid off?

Post by dm200 » Sat Nov 18, 2017 10:35 am

The OP seems to be in management and may have knowledge of what the future will bring - that is not available to the majority of employees. I would be cautious about violating any management confidential requirements of the company.

It may depend on details of the applicable state, but probably severance packages do not disallow unemployment benefits. Of course, unemployment benefits are probably very small.

neilpilot
Posts: 2838
Joined: Fri Dec 04, 2015 1:46 pm
Location: Memphis area

Re: Volunteer to be laid off?

Post by neilpilot » Sat Nov 18, 2017 10:47 am

dm200 wrote:
Sat Nov 18, 2017 10:35 am
The OP seems to be in management and may have knowledge of what the future will bring - that is not available to the majority of employees. I would be cautious about violating any management confidential requirements of the company.

It may depend on details of the applicable state, but probably severance packages do not disallow unemployment benefits. Of course, unemployment benefits are probably very small.
Agree with your comments, except that our employees received between in $10-$20k over 20-40 weeks. I might consider $10k small, but not "very small".

User avatar
dm200
Posts: 22280
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: Volunteer to be laid off?

Post by dm200 » Sat Nov 18, 2017 10:50 am

neilpilot wrote:
Sat Nov 18, 2017 10:47 am
dm200 wrote:
Sat Nov 18, 2017 10:35 am
The OP seems to be in management and may have knowledge of what the future will bring - that is not available to the majority of employees. I would be cautious about violating any management confidential requirements of the company.

It may depend on details of the applicable state, but probably severance packages do not disallow unemployment benefits. Of course, unemployment benefits are probably very small.

Agree with your comments, except that our employees received between in $10-$20k over 20-40 weeks. I might consider $10k small, but not "very small".
OK - I meant in relation to the salary of a well compensated management person.

Topic Author
marcopolo
Posts: 2488
Joined: Sat Dec 03, 2016 10:22 am

Re: Volunteer to be laid off?

Post by marcopolo » Sat Nov 18, 2017 10:55 am

mouses wrote:
Sat Nov 18, 2017 10:31 am
I'm a little confused - if you resign now without being laid off, you get your contract's severance package? And if instead they agree to lay you off, you get the same amount of money? The only difference being that in the second case you may also get unemployment payments?

I am not sure the size of the severance makes you ineligible for unemployment payments. It is worth checking this out. I was surprised that receiving severance did not prevent unemployment payments for me. You do have to be looking for work while you receive payments, however. At least where I lived.

As to the note by another poster about age discrimination, I think that is wishful thinking. One of the times I was laid off, MegaCorp had to provide us with a chart of the age of laid off employees vs. the ones left, and they had laid off exactly the top of the age pyramid. We had to sign an agreement not to sue in order to get the severance package. All sorts of discrimination in employment exist and there is little that employees can do about it.

No. I only get the full severance package if i am laid off or fired (as long as it is not "for cause").
If i resign, i would only get the vested portion of unpaid RSUs.
I have no plans to resign now. If not laid off, i would resign in 15 months (without severance).

Several people have asked about unemployment eligibility. I have not looked into it in great detail, but a quick search of my state's web site has the following. So the way i read it, i would not be eligible for the period covered by severance, over a year.

Severance Pay: Severance pay means one or more payments your employer makes to you because of your separation from your employer. Severance pay that exceeds 40% of Pennsylvania's average annual wage is deducted from your benefits (unless your AB Date is prior to January 1, 2012, or the severance results from an agreement entered into before January 1, 2012). The deductible portion of your severance pay is allocated to the weeks immediately following your separation from employment, based on your full-time weekly wage.

EXAMPLE: You received severance pay of $22,000. For Benefit Years that begin in 2017, 40% of Pennsylvania's average annual wage is $20,279.79. $22,000 - $20,279.79 = $1,720 in deductible severance pay. Your regular full-time weekly wage is $500. Therefore, $500 will be attributed to each of the first three weeks following your separation, and $220 will be allocated to the fourth week.
Once in a while you get shown the light, in the strangest of places if you look at it right.

harrychan
Posts: 1583
Joined: Sun Nov 14, 2010 9:37 pm
Location: Pasadena

Re: Volunteer to be laid off?

Post by harrychan » Sat Nov 18, 2017 10:59 am

Most companies would not offer top tier severance package for employees who volunteer and be better to hold off. Your company seems to be quite generous in terms of severance so I don't see any downside. I do however foresee they refusing to accept your offer until they understand the leadership strategy.
This is not legal or certified financial advice but you know that already.

Topic Author
marcopolo
Posts: 2488
Joined: Sat Dec 03, 2016 10:22 am

Re: Volunteer to be laid off?

Post by marcopolo » Sat Nov 18, 2017 11:04 am

dm200 wrote:
Sat Nov 18, 2017 10:50 am
neilpilot wrote:
Sat Nov 18, 2017 10:47 am
dm200 wrote:
Sat Nov 18, 2017 10:35 am
The OP seems to be in management and may have knowledge of what the future will bring - that is not available to the majority of employees. I would be cautious about violating any management confidential requirements of the company.

It may depend on details of the applicable state, but probably severance packages do not disallow unemployment benefits. Of course, unemployment benefits are probably very small.

Agree with your comments, except that our employees received between in $10-$20k over 20-40 weeks. I might consider $10k small, but not "very small".
OK - I meant in relation to the salary of a well compensated management person.

While it is small in relation to the severance package, I am a Boglehead. This would be similar to shaving a few basis points of an investment expense. So, if it turns out i am eligible, i would definitely look into pursuing it. But, i am not sure it would affect my decision on requesting the layoff either way.

Would you make the request? why or why not?
Once in a while you get shown the light, in the strangest of places if you look at it right.

User avatar
dm200
Posts: 22280
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: Volunteer to be laid off?

Post by dm200 » Sat Nov 18, 2017 11:07 am

While it is small in relation to the severance package, I am a Boglehead. This would be similar to shaving a few basis points of an investment expense. So, if it turns out i am eligible, i would definitely look into pursuing it. But, i am not sure it would affect my decision on requesting the layoff either way.

Would you make the request? why or why not?
Based on your narrative, I would lean towards making the voluntary layoff request (at some point, probably when general announcement is made) assuming I would get the good severance package.

btenny
Posts: 5141
Joined: Sun Oct 07, 2007 6:47 pm

Re: Volunteer to be laid off?

Post by btenny » Sat Nov 18, 2017 11:17 am

Take the layoff if you are ready financially. It sounds like you are ready mentally. Your boss and his boss may not want you to go but talk with them about you wanting to retire in a year or two. Once you make the decision be open with your desires and talk to all of them formally. Those conversations will tell you if they really want you to stay around and help or if they will let you go. I bet they will let you go. They are changing directions and your expertise is not a key ingredient of the new plan. So they need your salary space to give to some new hot shot that has the right expertise. Plus if they ask you to stay they are then sort of forced to reserve the RIF parachute $$ for you until you retire. That will give them big problems with other people if they decide to do different RIFs in the future. So they most likely they will just let you go and give you the parachute right now.

I did almost exactly what you propose in 1998. I took a company wide RIF and senior employee parachute $$$ in my 50s. My bosses did not want me to quit but let me go since I wanted to leave. In my case they were not happy with my decision. It was one of the best decisions of my life. I have had a ball for the last 18 years doing other stuff beside working all the time. So go for it if you can.

Good Luck.

PS.. I was also not eligible for unemployment due to the parachute but that was so long ago I am not sure it is relevant.

Topic Author
marcopolo
Posts: 2488
Joined: Sat Dec 03, 2016 10:22 am

Re: Volunteer to be laid off?

Post by marcopolo » Sat Nov 18, 2017 11:35 am

btenny wrote:
Sat Nov 18, 2017 11:17 am
Take the layoff if you are ready financially. It sounds like you are ready mentally. Your boss and his boss may not want you to go but talk with them about you wanting to retire in a year or two. Once you make the decision be open with your desires and talk to all of them formally. Those conversations will tell you if they really want you to stay around and help or if they will let you go. I bet they will let you go. They are changing directions and your expertise is not a key ingredient of the new plan. So they need your salary space to give to some new hot shot that has the right expertise. Plus if they ask you to stay they are then sort of forced to reserve the RIF parachute $$ for you until you retire. That will give them big problems with other people if they decide to do different RIFs in the future. So they most likely they will just let you go and give you the parachute right now.

I did almost exactly what you propose in 1998. I took a company wide RIF and senior employee parachute $$$ in my 50s. My bosses did not want me to quit but let me go since I wanted to leave. In my case they were not happy with my decision. It was one of the best decisions of my life. I have had a ball for the last 18 years doing other stuff beside working all the time. So go for it if you can.

Good Luck.

PS.. I was also not eligible for unemployment due to the parachute but that was so long ago I am not sure it is relevant.

Thanks.
Great perspective, and very helpful as I think through this decision.
Once in a while you get shown the light, in the strangest of places if you look at it right.

WildBill
Posts: 513
Joined: Wed Jun 29, 2016 10:47 pm
Location: San Antonio, Texas

Re: Volunteer to be laid off?

Post by WildBill » Sat Nov 18, 2017 11:38 am

Howdy

Here is a thought - you may actually be a lot more valuable to the company than before, at least for a couple of years or so.

If they are changing directions on product lines, they will want to maximize the profitability from harvesting the legacy products at minimum cost and minimum (zero if possible) incremental investment. From your description you are probably well positioned to do that, and you should understand that this gives you substantial leverage. You are solving a significant problem - they will not want to put young up and comers on the legacy business and will want to run it down without any drama and at minimum cost. Not many will have the inclination or skills to do it.

Recognizing this, you could have a very frank discussion about your future with the leadership of the organization about a one year to 18 month exit plan. “I will stick around for x time and do this to maximize our profitability during rundown in return for y.” You could probably negotiate something a lot better than what you are envisioning.

Worked for me once upon a time.

Good luck

W B
"Through chances various, through all vicissitudes, we make our way." Virgil, The Aeneid

Topic Author
marcopolo
Posts: 2488
Joined: Sat Dec 03, 2016 10:22 am

Re: Volunteer to be laid off?

Post by marcopolo » Sat Nov 18, 2017 11:48 am

WildBill wrote:
Sat Nov 18, 2017 11:38 am
Howdy

Here is a thought - you may actually be a lot more valuable to the company than before, at least for a couple of years or so.

If they are changing directions on product lines, they will want to maximize the profitability from harvesting the legacy products at minimum cost and minimum (zero if possible) incremental investment. From your description you are probably well positioned to do that, and you should understand that this gives you substantial leverage. You are solving a significant problem - they will not want to put young up and comers on the legacy business and will want to run it down without any drama and at minimum cost. Not many will have the inclination or skills to do it.

Recognizing this, you could have a very frank discussion about your future with the leadership of the organization about a one year to 18 month exit plan. “I will stick around for x time and do this to maximize our profitability during rundown in return for y.” You could probably negotiate something a lot better than what you are envisioning.

Worked for me once upon a time.

Good luck

W B

Interesting thought. I will have to consider if i want to be involved in the wind down. The current plan is to do it rather quickly. But, you are right, there may be an opportunity for me to basically own that process in exchange some additional upside.
Once in a while you get shown the light, in the strangest of places if you look at it right.

quantAndHold
Posts: 3438
Joined: Thu Sep 17, 2015 10:39 pm

Re: Volunteer to be laid off?

Post by quantAndHold » Sat Nov 18, 2017 12:18 pm

If it were me, I would try to get laid off. If you’re near retirement anyway, nobody is going to look at you sideways for asking for a layoff, and they will probably be grateful have someone who’s highly compensated to get off the payroll.

My experience is that once the layoffs start, they continue. But the first layoff always has the best severance package.

I knew a guy who basically made a career of being laid off. He was a long term employee who was eligible for a generous severance package. Got laid off. Took the package. Company hired him back a few months later, soon enough that he kept his seniority. Got laid off again a few months later, again with large severance. Hired back again. I think the third time he got laid off, the company was ringing around the drain, so that was the last time. Then he retired properly.

delamer
Posts: 9289
Joined: Tue Feb 08, 2011 6:13 pm

Re: Volunteer to be laid off?

Post by delamer » Sat Nov 18, 2017 12:27 pm

At this point, those who will be offered the restructuring severance package have not been announced -- is that correct?

Do you feel that you need to make your offer to retire before the announcement? Would it be possible to see how the announcement plays out and then offer to retire if you are not made surplus? Or does that not make sense?

Topic Author
marcopolo
Posts: 2488
Joined: Sat Dec 03, 2016 10:22 am

Re: Volunteer to be laid off?

Post by marcopolo » Sat Nov 18, 2017 12:50 pm

delamer wrote:
Sat Nov 18, 2017 12:27 pm
At this point, those who will be offered the restructuring severance package have not been announced -- is that correct?

Do you feel that you need to make your offer to retire before the announcement? Would it be possible to see how the announcement plays out and then offer to retire if you are not made surplus? Or does that not make sense?
That is correct. The list of individuals affected is being put together over the next couple of weeks. I am actually involved in that process. The target is to make the announcement in mid December.

I could certainly wait to see if I end up on being impacted first. I have a couple of concerns with that approach. First, i think the odds of my request being honored is much higher if it is made during this planning process. Once the action is taken, the company, (i think) would be less likely to make additional changes. Second, if I do this during the planning process, it may quite likely save the job(s) of one or two other people, who may not want to be let go.

So, If I decide to go forward with making the request, I am more inclined to do it in an open manner during the planning process.
Once in a while you get shown the light, in the strangest of places if you look at it right.

User avatar
whodidntante
Posts: 6665
Joined: Thu Jan 21, 2016 11:11 pm
Location: outside the echo chamber

Re: Volunteer to be laid off?

Post by whodidntante » Sat Nov 18, 2017 12:56 pm

To me, your proposal seems to be a win-win. Though management may feel that you are key to the transition and may not go for it.

User avatar
Watty
Posts: 17600
Joined: Wed Oct 10, 2007 3:55 pm

Re: Volunteer to be laid off?

Post by Watty » Sat Nov 18, 2017 1:04 pm

marcopolo wrote:
Sat Nov 18, 2017 9:56 am
dm200 wrote:
Sat Nov 18, 2017 9:50 am


Maybe, depending on circumstances, wait until financial incentives are (or may be) offered to folks being "downsized". Are these already decided and would you qualify?

Fifteen months is a short time.
I have a predefined severance contract, so I know exactly what I would be entitled to. It includes 12 months salary, vesting and payout of ALL restricted stock, and 12 months of paid COBRA, and few smaller items. The vesting of the RSUs is pretty significant and would more than make up for the 3 months of missing pay, missing annual bonus, and missing 401k matching. What I am not sure of is if they would honor my request.
What are they going to do it they don't honor your request, fire you?

As another poster mentioned you may be in a position that is needed while they wind down the old line of work so you may be valuable to them for a while. One thing that does not sound right is that even though the old line is not high growth I would think they could just sell off that business or just let it go for years earning money.

One possibility would be to negotiate to get your severance package at the end of 15 months when you planned on retiring so that you could help wind down the old business and then basically "have your cake and eat it too.". This could be a good deal for the company to0 since they would not have to worry about finding someone to take over your responsibilities while the old business is wound down.

One concern that I would have is that many, if not most, companies that try to reinvent themselves fail so the stock value might not be very high in 15 months. If the company goes bankrupt then any promises would not be worth very much either. Even if it does not go out of business a strategic bankruptcy is a possibility.

Topic Author
marcopolo
Posts: 2488
Joined: Sat Dec 03, 2016 10:22 am

Re: Volunteer to be laid off?

Post by marcopolo » Sat Nov 18, 2017 1:43 pm

Watty wrote:
Sat Nov 18, 2017 1:04 pm

What are they going to do it they don't honor your request, fire you?

As another poster mentioned you may be in a position that is needed while they wind down the old line of work so you may be valuable to them for a while. One thing that does not sound right is that even though the old line is not high growth I would think they could just sell off that business or just let it go for years earning money.

One possibility would be to negotiate to get your severance package at the end of 15 months when you planned on retiring so that you could help wind down the old business and then basically "have your cake and eat it too.". This could be a good deal for the company to0 since they would not have to worry about finding someone to take over your responsibilities while the old business is wound down.

One concern that I would have is that many, if not most, companies that try to reinvent themselves fail so the stock value might not be very high in 15 months. If the company goes bankrupt then any promises would not be worth very much either. Even if it does not go out of business a strategic bankruptcy is a possibility.
Yeah, it seems the downside is small...

Even though the legacy business is still generating revenue, the company is dis-inclined to keep capital tied up in what is perceived as a low-growth area. The plan is to wind that part of the business down pretty quickly. So, there maybe opportunity for some period of transition, but nothing like a year or more.

I am also concerned about how successful the company will be at the new business (i am less knowledgeable about that market). That does put the value of my RSUs at risk going forward. Since that is nearly half the value of the severance package, that is something to think about.
Once in a while you get shown the light, in the strangest of places if you look at it right.

delamer
Posts: 9289
Joined: Tue Feb 08, 2011 6:13 pm

Re: Volunteer to be laid off?

Post by delamer » Sat Nov 18, 2017 1:48 pm

marcopolo wrote:
Sat Nov 18, 2017 12:50 pm
delamer wrote:
Sat Nov 18, 2017 12:27 pm
At this point, those who will be offered the restructuring severance package have not been announced -- is that correct?

Do you feel that you need to make your offer to retire before the announcement? Would it be possible to see how the announcement plays out and then offer to retire if you are not made surplus? Or does that not make sense?
That is correct. The list of individuals affected is being put together over the next couple of weeks. I am actually involved in that process. The target is to make the announcement in mid December.

I could certainly wait to see if I end up on being impacted first. I have a couple of concerns with that approach. First, i think the odds of my request being honored is much higher if it is made during this planning process. Once the action is taken, the company, (i think) would be less likely to make additional changes. Second, if I do this during the planning process, it may quite likely save the job(s) of one or two other people, who may not want to be let go.

So, If I decide to go forward with making the request, I am more inclined to do it in an open manner during the planning process.
I understand your reasoning and it makes sense. I suppose there is always a chance that they'll meet you in the middle -- ask you to stay 6 additional months and provide appropriate incentives.

Good luck, and report back!

anonenigma
Posts: 736
Joined: Thu Apr 21, 2011 11:58 pm

Re: Volunteer to be laid off?

Post by anonenigma » Sat Nov 18, 2017 1:56 pm

Does the 12 months of COBRA get you to Medicare?

StealthRabbit
Posts: 434
Joined: Sat Jun 13, 2009 1:25 am

Re: Volunteer to be laid off?

Post by StealthRabbit » Sat Nov 18, 2017 2:17 pm

Sounds like you have a great plan and opportune timing.

BTDT with my previously great company of 35yrs. (I hired in HS@age 17, and the company paid for 5 degrees and put up with me... through 10+ great job assignments) tho I would have jumped earlier if availed the opportunity.

I had several friends who ‘volunteered’ to leave as well. It really worked best for purposed individuals who had the confidence, foresight, and planning to MOVE ON. You obviously have better things to do, than ‘hang-around’. and you will be availed / find many rewarding ways to contribute your expertise, apart from your current job.

Make your plans, and play this out to your best advantage.

I went out well before 65, so still seeking HC options which all dissolved with ACA. That has been the rough road.

When I took my severance, I invested the equivalent into business assets using a section 179 (accelerated depreciation) that took care of my tax consequences, as well as built a few other businesses. One of my friend’s did similar and built a small factory in an Enterprise Zone... (lots of gov and local perks) he worked very strategically, and diligently & sold the enterprise for $10m. That helped his cash flows! It was good to utilize his career momentum for a legacy purpose (providing many jobs for his community).

Good luck, I hope the company can help meet your objectives!

What a great way to ‘disembark’, you are of the fortunate few :wink:

Topic Author
marcopolo
Posts: 2488
Joined: Sat Dec 03, 2016 10:22 am

Re: Volunteer to be laid off?

Post by marcopolo » Sat Nov 18, 2017 2:20 pm

anonenigma wrote:
Sat Nov 18, 2017 1:56 pm
Does the 12 months of COBRA get you to Medicare?
Not even close. I will be 51 next month. But, my retirement plan budget has a large allocation for healthcare expenses.
Once in a while you get shown the light, in the strangest of places if you look at it right.

Topic Author
marcopolo
Posts: 2488
Joined: Sat Dec 03, 2016 10:22 am

Re: Volunteer to be laid off?

Post by marcopolo » Sat Nov 18, 2017 2:23 pm

StealthRabbit wrote:
Sat Nov 18, 2017 2:17 pm
Sounds like you have a great plan and opportune timing.

BTDT with my previously great company of 35yrs. (I hired in HS@age 17, and the company paid for 5 degrees and put up with me... through 10+ great job assignments) tho I would have jumped earlier if availed the opportunity.

I had several friends who ‘volunteered’ to leave as well. It really worked best for purposed individuals who had the confidence, foresight, and planning to MOVE ON. You obviously have better things to do, than ‘hang-around’. and you will be availed / find many rewarding ways to contribute your expertise, apart from your current job.

Make your plans, and play this out to your best advantage.

I went out well before 65, so still seeking HC options which all dissolved with ACA. That has been the rough road.

When I took my severance, I invested the equivalent into business assets using a section 179 (accelerated depreciation) that took care of my tax consequences, as well as built a few other businesses. One of my friend’s did similar and built a small factory in an Enterprise Zone... (lots of gov and local perks) he worked very strategically, and diligently & sold the enterprise for $10m. That helped his cash flows! It was good to utilize his career momentum for a legacy purpose (providing many jobs for his community).

Good luck, I hope the company can help meet your objectives!

What a great way to ‘disembark’, you are of the fortunate few :wink:

Thanks for sharing your and your friends experiences. Helps to get perspective from those that have been through similar paths.
Once in a while you get shown the light, in the strangest of places if you look at it right.

Topic Author
marcopolo
Posts: 2488
Joined: Sat Dec 03, 2016 10:22 am

Re: Volunteer to be laid off?

Post by marcopolo » Mon Nov 20, 2017 12:06 am

Thanks to all that provided their thoughts. All very helpful in my decision making process.

I have decided to make the request. Now, I just need to find the appropriate time to initiate the conversation.
I will report back once I know how it goes. Maybe it will provide some insight to others in similar situation.
Once in a while you get shown the light, in the strangest of places if you look at it right.

Carl53
Posts: 1853
Joined: Sun Mar 07, 2010 8:26 pm

Re: Volunteer to be laid off?

Post by Carl53 » Mon Nov 20, 2017 6:42 am

marcopolo wrote:
Sat Nov 18, 2017 2:23 pm
StealthRabbit wrote:
Sat Nov 18, 2017 2:17 pm
Sounds like you have a great plan and opportune timing.

BTDT with my previously great company of 35yrs. (I hired in HS@age 17, and the company paid for 5 degrees and put up with me... through 10+ great job assignments) tho I would have jumped earlier if availed the opportunity.

I had several friends who ‘volunteered’ to leave as well. It really worked best for purposed individuals who had the confidence, foresight, and planning to MOVE ON. You obviously have better things to do, than ‘hang-around’. and you will be availed / find many rewarding ways to contribute your expertise, apart from your current job.

Make your plans, and play this out to your best advantage.

I went out well before 65, so still seeking HC options which all dissolved with ACA. That has been the rough road.

When I took my severance, I invested the equivalent into business assets using a section 179 (accelerated depreciation) that took care of my tax consequences, as well as built a few other businesses. One of my friend’s did similar and built a small factory in an Enterprise Zone... (lots of gov and local perks) he worked very strategically, and diligently & sold the enterprise for $10m. That helped his cash flows! It was good to utilize his career momentum for a legacy purpose (providing many jobs for his community).

Good luck, I hope the company can help meet your objectives!

What a great way to ‘disembark’, you are of the fortunate few :wink:

Thanks for sharing your and your friends experiences. Helps to get perspective from those that have been through similar paths.
Just be careful should you decide to invest much of your nest egg in a business. A cousin of mine left his well paying corporate position with a large pot of cash, not sure if it was stock options or what. Bought a cabinet business that had more than one factory. It went belly up, and four million and perhaps 12 years later he is flying the globe selling product at age 65 for some other outfit to keep afloat.

Topic Author
marcopolo
Posts: 2488
Joined: Sat Dec 03, 2016 10:22 am

Re: Volunteer to be laid off?

Post by marcopolo » Mon Nov 20, 2017 8:24 am

Carl53 wrote:
Mon Nov 20, 2017 6:42 am
marcopolo wrote:
Sat Nov 18, 2017 2:23 pm
StealthRabbit wrote:
Sat Nov 18, 2017 2:17 pm
Sounds like you have a great plan and opportune timing.

BTDT with my previously great company of 35yrs. (I hired in HS@age 17, and the company paid for 5 degrees and put up with me... through 10+ great job assignments) tho I would have jumped earlier if availed the opportunity.

I had several friends who ‘volunteered’ to leave as well. It really worked best for purposed individuals who had the confidence, foresight, and planning to MOVE ON. You obviously have better things to do, than ‘hang-around’. and you will be availed / find many rewarding ways to contribute your expertise, apart from your current job.

Make your plans, and play this out to your best advantage.

I went out well before 65, so still seeking HC options which all dissolved with ACA. That has been the rough road.

When I took my severance, I invested the equivalent into business assets using a section 179 (accelerated depreciation) that took care of my tax consequences, as well as built a few other businesses. One of my friend’s did similar and built a small factory in an Enterprise Zone... (lots of gov and local perks) he worked very strategically, and diligently & sold the enterprise for $10m. That helped his cash flows! It was good to utilize his career momentum for a legacy purpose (providing many jobs for his community).

Good luck, I hope the company can help meet your objectives!

What a great way to ‘disembark’, you are of the fortunate few :wink:

Thanks for sharing your and your friends experiences. Helps to get perspective from those that have been through similar paths.
Just be careful should you decide to invest much of your nest egg in a business. A cousin of mine left his well paying corporate position with a large pot of cash, not sure if it was stock options or what. Bought a cabinet business that had more than one factory. It went belly up, and four million and perhaps 12 years later he is flying the globe selling product at age 65 for some other outfit to keep afloat.

Thanks for your word of caution. But, for better or worse, i tend to be rather conservative with my investments. So, If were to go down the path of pursuing my own business, it would be with a very small portion of my assets.
Once in a while you get shown the light, in the strangest of places if you look at it right.

Topic Author
marcopolo
Posts: 2488
Joined: Sat Dec 03, 2016 10:22 am

Re: Volunteer to be laid off? [OP:Update]

Post by marcopolo » Wed Nov 29, 2017 5:43 pm

I had the conversation with the CEO, then the rest of the senior management team, this week. It went better than I expected.
While it came as a bit of a surprise, everyone understood my desire to exit the company given the new direction it is taking.

The company has agreed to include me in the restructuring, but they want to couch it as me taking an early retirement package, so as not to spook some of the people that are staying on in the small group i manage. The changes will be announced next week.

In addition to the very generous severance package, they have asked me to stay on for a few months to help with the transition. They are giving me an additional retention bonus to commit to doing that. Unexpected, but i will take it! Also left the door open to the possibility for some consulting in the future.

Next decision is whether or not to look for another job to carry me to my planned retirement move, or just call it day and get a jump on early retirement. But, that is a discussion for another day.

Thanks again for all that provided their perspective, very helpful, as always. :sharebeer
Last edited by marcopolo on Wed Nov 29, 2017 6:05 pm, edited 1 time in total.
Once in a while you get shown the light, in the strangest of places if you look at it right.

User avatar
dm200
Posts: 22280
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: Volunteer to be laid off? [OP:Update]

Post by dm200 » Wed Nov 29, 2017 6:03 pm

marcopolo wrote:
Wed Nov 29, 2017 5:43 pm
I had the conversation with the CEO, then the rest of the senior management team, this week. It went better than I expected.
While it came as a bit of a surprise, everyone understood my desire exit the company given the new direction it is taking.
The company has agreed to include me in the restructuring, but they want to couch it as me taking an early retirement package, so as not to spook some of the people that are staying on in the small group i manage. The changes will be announced next week.
In addition to the very generous severance package, they have asked me to stay on for a few months to help with the transition. They are giving mean additional retention bonus to commit to doing that. Unexpected, but i will take it! Also left the door open to the possibility for some consulting in the future.
Next decision is whether or not to look for another job to carry me to my planned retirement move, or just call it day and get a jump on early retirement. But, that is a discussion for another day.
Thanks again for all that provided their perspective, very helpful, as always. :sharebeer
Sounds good -

User avatar
Kenkat
Posts: 5349
Joined: Thu Mar 01, 2007 11:18 am
Location: Cincinnati, OH

Re: Volunteer to be laid off? [OP Update]

Post by Kenkat » Wed Nov 29, 2017 8:26 pm

Congratulations, this is the dream scenario for many who are nearing retirement.

WildBill
Posts: 513
Joined: Wed Jun 29, 2016 10:47 pm
Location: San Antonio, Texas

Re: Volunteer to be laid off? [OP Update]

Post by WildBill » Wed Nov 29, 2017 9:34 pm

Bravo

You work with good people.

W B
"Through chances various, through all vicissitudes, we make our way." Virgil, The Aeneid

Post Reply