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Comment by whack | Hacker News Reader

Aren't these buyout offers the worst way to trim headcount? The people most likely to take them are the ones who are good at their job, and confident of landing another one at a different company. The people least likely to take them are the mediocre ones who know they'll never land an equally good position elsewhere. If you want to keep your best people, this seems like the exact opposite way to do it.

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Many times the offers are a thinly-veiled attempt to get rid of their older (more expensive) employees. People nearing retirement age are most likely to have many years of service, making a severance package that pays per tenure especially appealing. And there’s the threat of layoffs if you don’t accept the offer. If you’re in your 50s or 60s it’s hard to get a new job regardless of how qualified you are, so this makes gambling on your continued employment risky.

My mother went through this exact exercise two years ago. Management was clear that, if not enough employees took the buyout, they would start layoffs with less generous terms. From previous rounds of layoffs she knew older employees were the first to go, so she took the buyout and got 52 weeks paid severance.

The day she resigned, she received a termination letter offering only 40 weeks. Fortunately the company stood by the more generous offer. But it took her the better part of a year to get a new job, and it pays much less than the one she invested 30+ years in. She’s from a generation when you worked at a single company for life, but companies don’t operate like that any more.

Almost the exact same thing happened to one of my family members too. 50 year old programmer with a decade+ tenure at a large corporation. 52 weeks severance retirement offer. It took a year to find a new job and only now, almost a decade later, is he above his old salary.

If the company is laying people off en masse, your "best people" are going to start looking for other jobs anyway unless they have faith in the company leadership.

Off the top of my head, a couple of ways offers help in that respect:

Buyout offers soften the blow ahead of involuntary layoffs. They give people a sense of agency, which improves morale at a time when it's likely to be low.

Offers give people time to plan. Even if they don't take the offer, they'll have an idea of the numbers the company is looking to lose.

Offers help spread out the impact of layoffs. Laying off a large number of staff at once can cause organizational chaos; laying off a large number of staff over a span of weeks casts a pall over everything until the layoffs are over. Having people leave voluntarily gives time for an orderly transition without causing as much dread.

For highly compensated people very close to retirement age (which is probably who they are targeting), 60 weeks pay is a mighty fine way to walk out. A non-compete tied to the industry probably dissuades the younger competent people from jumping ship

They aren’t necessarily trimming headcount. They’re replacing them with Indian workers on H1B visas from Infosys. However, quality will decrease tremendously.

https://m.timesofindia.com/business/india-business/1000-veri...

This policy sounds slightly similar to Amazon paying employees $5000 to quit. [0]

I suppose that it is intended to increase worker motivation during reshuffling and reorganization when morale is likely to be low.

[0] https://www.cnbc.com/2018/05/21/why-amazon-pays-employees-50...

I don’t know how Verizon is doing it but sometimes the offers are structured so that they exclude “essential employees”, ie anyone they like. So, if you get the offer it’s a sign they think you’re not any good :-p

I believe the intention is to trim cost

Short-term cost though, if whack's thinking is correct. Longer-term talent drains means execution risks sliding even further into mediocrity

Only the short term matters in these cases. Management will already be out with their bonuses by the time the org is a skeleton of its former self.

Companies throw a wide net in these matters to prevent lawsuits, such as age discrimination lawsuits. But then more managed process takes over on the individual level.

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