Layoff Rehire and Career Options

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Topic Author
Pickle11
Posts: 19
Joined: Mon Dec 07, 2015 8:28 pm

Layoff Rehire and Career Options

Post by Pickle11 » Fri Feb 15, 2019 4:27 pm

Thanks in advance for the great service you provide here. I will now become a regular poster after lurking for years
Age 34
Wife 33
2 Kids
Salary 77k
Bonus 10k
MCOL city

Wife works and carries health insurance. Will continue to work

HHI 160k, Net worth 750k

I have been working for a company for a real estate 10 years gradually progressing but driving down an unremarkable career path. I have always been reliable, Company was very humane but has been downsizing the entire time I have been there. Company has been sold to a private equity buyer with management relocated to coastal cities

I was informed of my layoff Feb 1 with term date in mid summer. Fast forward to this week company wants me to stay and sees a need for my position for now. Will rehire to fill my position.

I will be eligible for severance if I decide to leave.

Severance payout is approximately 50k (60% of salary), they have offered me approximately 20k to stay with 1/2 payable today 1/2 in six months.

Initial thoughts, I am missing out out on career growth elsewhere and have a huge runway to find a new job. This is gift to be paid to a situation I wanted to progress out of. If the stay payout was higher this would be difficult. I estimate their costs to replace me is 75-100k (50k severance, 20k payroll overlap for 3 months of training and 10k recruiter commission.)

Cons, young family and new job could be more stressful ( any new job would be).

Thoughts?

BanditKing
Posts: 625
Joined: Tue Oct 29, 2013 11:11 pm

Re: Layoff Rehire and Career Options

Post by BanditKing » Fri Feb 15, 2019 4:54 pm

Pickle11 wrote:
Fri Feb 15, 2019 4:27 pm
Will rehire to fill my position.
What do you mean here? Just that they will rehire you to reill?
Pickle11 wrote:
Fri Feb 15, 2019 4:27 pm
I will be eligible for severance if I decide to leave.
What is the duration of your eligibility to voluntarily leave and still receive severance?

My initial thought is to keep the position and take the 10k bonus. Immediately start aggressively hunting for a new job. If you find something before the severance-eligibility runs out, then there you go. If you don't, and things just suck, you can still quit one day before it expires to receive the severance and continue job hunting.

They obviously see some value in keeping you. It may be personal, it may just that they need a body until the new equity overlords decide where to drop the axe.

If things improve, this could also be an opportunity to stand up, appreciate them keeping you around, and see what you can do to move up in the company (assuming you have any desire at all, which understandably may not be the case).

Remaining eligible for severance is a big key here.

Topic Author
Pickle11
Posts: 19
Joined: Mon Dec 07, 2015 8:28 pm

Re: Layoff Rehire and Career Options

Post by Pickle11 » Fri Feb 15, 2019 6:01 pm

Not sure if this posted twice.

The company will essentially hire my replacement as permanent and let me walk out the door mid-summer with my severance. I will have to train them and transition my work. If I accept the 20k, my severance window closes.

Timeline for transition date is mid summer. Therefore I can interview in May and June and roll to a new position in July.

I need to notify them by 2/22 if I plan on staying. If I stay, I would be reeligible for severance when the equity overlords drop the axe again.

JuniorBH
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Re: Layoff Rehire and Career Options

Post by JuniorBH » Fri Feb 15, 2019 6:41 pm

Are there conditions upon accepting the $10K now (i.e. if you leave within x months, you owe it back)?

Regardless, if you're really serious about wanting a career change, I would probably take the severance. That gives you a number of months of income to find a new job.

The caveat there is that you actually have some type of plan formalized; I wouldn't take the severance and leave the current job just to "figure it out". Sounds like you've known for a while that current role wasn't the best fit long term, and perhaps you already have thoughts on where you'd best fit for the next role.

mattyslice
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Joined: Sun Feb 10, 2019 2:41 pm

Re: Layoff Rehire and Career Options

Post by mattyslice » Fri Feb 15, 2019 6:55 pm

Job market is hot right now almost regardless of location in the US. Jobs in your salary range are fairly easy to find.

My two cents...take the severance and find a company that is growing, less stressful (I was in banking right out of undergrad from 2008 to 2012, worrying about your job everyday sucks), and will better your marketability as an employee.

Topic Author
Pickle11
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Joined: Mon Dec 07, 2015 8:28 pm

Re: Layoff Rehire and Career Options

Post by Pickle11 » Fri Feb 15, 2019 7:22 pm

No strings attached to the 10k payment. Just have to sign back on as a permanent employee and lose forecasted severance.

I figure jobs at 80k total comp are wide open. I am a cpa but primarily worked in reporting / fp&a.

More worried about long hours with two very small children.

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Watty
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Re: Layoff Rehire and Career Options

Post by Watty » Fri Feb 15, 2019 11:16 pm

Pickle11 wrote:
Fri Feb 15, 2019 4:27 pm
Severance payout is approximately 50k (60% of salary), ....

Initial thoughts, I am missing out out on career growth elsewhere and have a huge runway to find a new job. This is gift to be paid to a situation I wanted to progress out of.
This is a really screwey situation where it does not sound like they really know what they are doing. There could also be something else going on that you do not know about like one of the executives that was going to relocate decided not to.

It does not sound like there is much future with that company.

If so then I would take the severance option and that would give you about five months to do your job search to get a job lined up by the end date. Even if you don't find a new job by then the severance will take you through the end of the year without any financial loss.

It would be good to get everything in writing especially the end date. If there are problems with hiring your replacement or getting them trained they might want to stretch that out longer.

Grt2bOutdoors
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Re: Layoff Rehire and Career Options

Post by Grt2bOutdoors » Sat Feb 16, 2019 3:24 am

What is the level of e-fund? Assuming you are already living below means? You can take the severance but start job search now. FP&A is a stressful job and yes, hours can be long too in those busy periods. Even in a strong job market, it takes time from obtaining interviews to actual hire date.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

Carl53
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Re: Layoff Rehire and Career Options

Post by Carl53 » Sat Feb 16, 2019 5:06 am

Need to see any agreement that you will need to sign. Will there be an onerous non-compete agreement? If not, grab the $50k. If there is, it may be time to forget the money and find a new job anyway.

Topic Author
Pickle11
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Joined: Mon Dec 07, 2015 8:28 pm

Re: Layoff Rehire and Career Options

Post by Pickle11 » Sat Feb 16, 2019 8:58 am

E fund is topped up. Yes, living below means as this has been brewing for a year.

Great question on the non-compete. Haven't heard anyone mention it. Will find out more.

Opportunity costs for the company seem lopsided in this deal, 20k to me now to avoid paying 50k plus overlap payroll on a new analyst and any other transition costs.

bungalow10
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Re: Layoff Rehire and Career Options

Post by bungalow10 » Sat Feb 16, 2019 9:15 am

Take the money to stay on the condition that you also have severance at the end, which can be initiated by you OR the company at any time (if things are going well, you might stay a few extra months or even years). They cannot rescind the offer of severance unless agreed to by you.

Work your six months, taking time to also find your next job. Get the timing down so you have little time between gigs and can bank the severance and use the 20k for something you have been saving for or splurge a little.
An elephant for a dime is only a good deal if you need an elephant and have a dime.

cherijoh
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Location: Charlotte NC

Re: Layoff Rehire and Career Options

Post by cherijoh » Sat Feb 16, 2019 9:58 am

Pickle11 wrote:
Fri Feb 15, 2019 6:01 pm
Not sure if this posted twice.

The company will essentially hire my replacement as permanent and let me walk out the door mid-summer with my severance. I will have to train them and transition my work. If I accept the 20k, my severance window closes.

Timeline for transition date is mid summer. Therefore I can interview in May and June and roll to a new position in July.

I need to notify them by 2/22 if I plan on staying. If I stay, I would be reeligible for severance when the equity overlords drop the axe again.
I have several friends who have worked for companies that were sold to private equity firms. The picture isn't pretty - they tend to suck the company dry and quite often the end result is bankruptcy or a lot more layoffs. There is no guarantee that the next severance will be as generous as this one. It could also happen at a bad point in the economic cycle rather than when we have full employment as we do now. Based on your post, I would go with the severance package now.

If you are risk averse, the natural tendency is to stick with what you know. I worked for a large company that decided to relocate our site. I was offered a transfer or a separation package provided I stayed until they released me. Most of my colleagues were surprised that I took the package because I am risk averse! The key was that I had a financial backstop and knew that I wouldn't be happy at the other site (which was out of state and had management issues).

Your company may find that getting replacement workers is difficult - does the paperwork have a specific date of separation or did they leave it vague? Our site closure kept getting pushed off as there was construction required at the new site and it turned out to be a hard winter. We signed the paperwork in October and I left at the end of July the next year. I had decided to go back to school so the timing worked well as I started in August.

If a firm separation date is mentioned, there may be the opportunity for a retention bonus in addition to severance if they can't easily hire your replacement and need to renegotiate the date. I know several people who have been in this situation.

Actually having this much of a lead time can be to your benefit. You have an opportunity to beef up your emergency fund. You can save your vacation days if they will be paid out in addition to severance. You can start gearing up your networking by letting people know you will be looking for a job shortly. I would recommend beefing up your LinkedIn profile (or creating one if you don't have one). Then spend some time reconnecting with people of whom you lost track. Are there any professional or networking groups associated with your industry? Get involved and attend meetings! Some of those groups cut way back on activities during the summer.

Good Luck!

Topic Author
Pickle11
Posts: 19
Joined: Mon Dec 07, 2015 8:28 pm

Re: Layoff Rehire and Career Options

Post by Pickle11 » Sat Feb 16, 2019 11:47 am

Thanks everyone.

I am probably underestimating my leverage in this situation. My long lead time until my actual term date is very favorable to me. Will keep all this in mind as I negotiate back and fourth with mindfulness to not burn my longstanding relationships within the company.

I think my approach should be to decline the perm offer and at the same time confirm the set exit date remains the same in view of the new circumstances. In addition, I should open the door to flexibility on the leave date provided there is a stay bonus.

The initial ask to my director seemed astonishing but I don't believe he was considering all the costs involved nor did he have any input on the layoff. He was trying to give a young guy with two kids a lifeline. Private Equity wiped out positions to make numbers, further reinforcing this is not the best long-term or short term status quo career option.

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