Whatever the corporate euphemism – and the speed with which they change is increasing – these are job cuts no matter the terminology. Some people will be fired. At GM, the company is “rightsizing,” hoping to shrink it’s salaried workforce by about 7,000.
For the 18,000 employees with more than 12 years of experience, the company is starting with a voluntary buyout. Affected GM workers have about two weeks to decide (November 19th has been the reported decision date). If too few employees accept, the company will begin a round of layoffs. Other automakers are predicted to undertake similar programs. What should you consider when offered a rightsizing voluntary buyout package or de-layering severance package?
Nearing retirement or passed over for promotions?
The stage in your career, advancement potential and family circumstances will all influence your decision.
If you are in your middle to late 50s, it could be time to sit down with a financial analyst and evaluate whether early retirement might be in the cards. When potential exists to freelance or open a consulting service, this could be a way to take more control over your own schedule.
For anyone who has applied for a promotion and been overlooked, a buyout could provide a cushion while looking for the next opportunity. When you have marketable skills, you might start job-hunting immediately to have something else lined up when the current job ends.
As much as possible try to remove emotion from the process. This is a business decision for your employer and you need to treat it as one as well. Ask yourself these questions:
- How could my workload increase once there are fewer people on our team?
- Do I like the team I’m currently working with?
- Is it likely my position could be on the block if too few take the buyout?
Then negotiate. This is where seeking legal review of a voluntary buyout or severance package is crucial. A law firm that regularly works with employees facing these same tough decisions will know the right questions to consider in your circumstances. A lawyer can also ensure you receive the best possible exit package.
Generally, an employer has some room to negotiate voluntary buyouts and severance packages. Depending on your seniority, you may ask for a bridge between your end-of-work date and when you begin drawing retirement benefits. If you are younger, seek an agreement regarding the tone of references or enforcement of a non-compete agreement (especially if your specialty is in a niche that might require working for a competitor).
Lump-sum pension distribution
This is a life altering and irrevocable decision. Speak with a financial advisor before making it. Not only are there tax consequences and early withdrawal penalties, a mistake could leave you without the resources to fully fund your retirement.
To make an informed decision, you need to understand the package (including all the tax implications), what is on offer to others similarly situated as well as your legal rights. Even if you have never talked to an attorney before, recognize that consulting with an employment lawyer protects your rights. It could also have a long-lasting effect on your finances.