My employer will shed 1,500 IT jobs here over next three years

[Dreamer]

I can't even imagine how that would feel. You are 52 years of age and think that you have your ducks in a row and bam. I don't have any words of wisdom, but hope that you can hold old until 55 or that it is the way that Going-Early remembers. Best of luck and I hope it works out right for you.

 

[going-early]

Going-Early, I owe you. I now remember there was something magic about being 49.5 yrs old and older regarding the pension. I went back in and re-ran the numbers and checked "anticipate being laid off" vs. not being laid off. When doing that the result was only reducing by the last 2.5 years of accrual for me and no PENALTY was applied. Thanks again...

No Problem. I registered and posted just to ease your anxiety. The funny thiing is (at my location anyway), if you planned on leaving at 55 and can request a layoff at 54, you would collect 6 months severance pay and any remaining unemployement. You would end up ahead by being home a year early by getting laid off. Of course the employer wouldnt be as interested in this plan as the employee would be.

 

[growing_older]

Wow... that seems like a big hit for taking your retirement one month early....

I'm sorry to hear you are facing possible layoff or other restructuring that could so drastically affect your pension. I have no direct experience like this, but I have heard many terrible stories from friends in HR about companies that worked hard to layoff or reclassify workers in the last two years before they would be owed a pension. I hope after that many years that your megacorp will treat you fairly, but I doubt you can count on that.

 

[supernova72]

Hi. I am sorry you have to go through this. Hopefully you have been diligently tracking your expenses since joining the forum. If not you should look into doing that. Using you credit card and bank statements you should be able to get two or three years spending information. Its easy to cut the budget a bit and know what is truly realistic for YOU once you know what you have been spending on in the past.


Have you run FIRECalc with your numbers to see what the Max spending is with 95% success? That may give you a good handle on the level of cuts you'd need to make.

All the best to you. I am hoping this works out better than you can imagine.

Hi, I have run FIRECALC and it comes up at 93% based on working until 55 and my what I plan to spend annually etc. Ultimately I'd like to finish out with my company and not make a decision early so I'm trying to be as flexible and realistic as possible. Also keeping retiree medical is very important as well as the majority of the pension.

Starting in 2013 I've started tracking expenses much closer. On the surface I spend less on groceries than I budgeted but probably more on unplanned gifts etc (friends kids are graduating from college etc).

Thanks for the kind words.

 

[Live And Learn]

Hi, I have run FIRECALC and it comes up at 93% based on working until 55 and my what I plan to spend annually etc. Ultimately I'd like to finish out with my company and not make a decision early so I'm trying to be as flexible and realistic as possible. Also keeping retiree medical is very important as well as the majority of the pension.

Starting in 2013 I've started tracking expenses much closer. On the surface I spend less on groceries than I budgeted but probably more on unplanned gifts etc (friends kids are graduating from college etc).

Thanks for the kind words.

93% is very respectable ! When faced with a similar "job relocation" situation I started asking friends if they would entertain sharing a small apartment to get us through the worst of it. You'd be surprised how many said they were thinking about it but didn't know how to bring it up.

Flexibility is key. I'm always amazed by the resiliency we have.

 

[supernova72]

Wow... that seems like a big hit for taking your retirement one month early....

But, from what you seem to be saying now..... if you do NOT start your retirement until you are 55, you still will get $2,900 per month (or maybe a little less since you did not work the last few years)....

I would think this would hold true being laid off or just leaving on your own...

Hi, "Going-Early" works for the same company and gave me a good tip. I was in error on the 50% hit to monthly pension. If you are laid off (voluntary or not) the penalty is much less.

so $2900 becomes ~ $2650 vs. $1500 like I thought before. That 50% is if you just up and quit. My error.

 

[supernova72]

Ouch is right...I don't think it's unusual for older HCE's to find themselves in this situation nowadays though...corporations are really lobbying hard to increase the number of H1B visas.

Does the severence come close to making up the difference in the pension payouts if you elect ER?

DB plans are almost non-existent in the private sector anymore. I guess that this was to be expected at some point as well. Hope you're prepared and that things work out for you.

The severance is 26 weeks pay so I'd need to run the numbers. This voluntary layoff is a one time offering within IT only. "Retire-early" poster gave me a tip and there is something magic about being 49.5 yrs old (or older) and being laid off so that would take some of the sting out of the pension reduction. I owe him/her one for pointing that out. Cheers.

 

[zedd]

Current management reminiscent of Jack Welch.

During the early 1980s he was dubbed "Neutron Jack" (in reference to the neutron bomb) for eliminating employees while leaving buildings intact.

Hang in there Supernova. Today will be a rough day.

Zedd

 

[BigNick]

Oops. Sorry to be unclear. The $2900 monthly pension is if I work until my 55th Bday. If I go into the tool and put in 54 yrs, 11 months its reduced by 40%. If I put in today (52.5 years old), it's reduced by about 50%. These reductions are if I just leave without being laid off. Thanks!

Assuming a 25-year retirement, you're looking at a hit of close to half a million dollars. You would clearly be nuts to go quietly. If you currently earn $7,000/mo then it would be in your interest to work for free for the remaining 2.5 years!

Where you may have some scope for leverage is in the likely fact that the person deciding who gets relocated/cut/etc probably has different numbers influencing his/her targets (for example, they may not include pension liabililties, and if they do, they may not be your actual numbers, but some notional ones). One thing you can maybe start to do today is to try and find out what criteria are being used, and how you can game them to your advantage when it comes to one-on-one negotiations. With 1,500 people to move/downsize, you're going to be dealing with someone either external or junior, who probably doesn't care about the company's overall best interests either way, as long as he/she gets the boxes ticked.

 

[zedd]

An interesting read -> Store | Financial Samurai

Also on the topic of gaming the system, suggest that you get familiar with the terms of COBRA and PPACA (aka ObamaCare.) Boeing has a pretty sweet deal for subsidized health care for retirees. AFAIK thats off the table with a layoff.

Zedd

 

[eytonxav]

I am still waiting for the day when mega corps start announcing it is now time to downsize executive compensation and benefits to maintain some semblance of parity with the working class

 

[ziggy29]

I am still waiting for the day when mega corps start announcing it is now time to downsize executive compensation and benefits to maintain some semblance of parity with the working class

You might as well wait for Godot....

 

[ziggy29]

Also on the topic of gaming the system, suggest that you get familiar with the terms of COBRA and PPACA (aka ObamaCare.) Boeing has a pretty sweet deal for subsidized health care for retirees. AFAIK thats off the table with a layoff.

In most cases, I think employers who offer retiree health care (assuming it's not being taken away) will give it to those who are laid off if they already have the age and years of service to be eligible for retirement just as they would still receive their pension (if any). And sometimes they will allow you to retire in lieu of being laid off, but that's not necessarily as common. The devil is in the details here.

 

[Chuckanut]

I am still waiting for the day when mega corps start announcing it is now time to downsize executive compensation and benefits to maintain some semblance of parity with the working class

Ha Ha Ha !!!! You are a funny guy.

In reality they will probably reward themselves with bigger pay and benefits for the good job they did getting rid of the detritus known as "hard working, loyal employees."


'

 

[Chuckanut]

The reality is that the handwriting was on the wall a few years ago when the corporate headquarters was moved from Seattle to Chicago. The message was and is clear: We will move work to areas that make us more cost competitive.

I suspect they will continue to move work to lower cost areas in and out of the USA. However, the experience with the 787 will probably slow that process down quite a bit. They learned that there is no substitute for experienced engineers and assembly workers when it comes to complex, critical devices such as airplanes. (Tour a Boeing plant when you get a chance. It is amazingly complex and organized. I am in awe of how they assemble a modern jet aircraft.) Still, it will take time to develop the necessary expertise outside the Seattle area. The 787 provided ample proof of that.

One local legislator has already mentioned going out and trying to lure some Airbus contracts. I think he has the right idea. Moaning and groaning over Boeing will do little good. Keeping skills current and managing one's finances so that one is not vulnerable to the winds of corporate decisions is the only way to survive in the future.

The saying in the Seattle area used to be "If it's not Boeing, I'm not going." It should now be "Boeing is going, build a bridge and get over it."

 

[Felix Mulier]

I'll know more about the details from the Monday morning meeting. My main goal is to keep my job at this company of course.

Supernova,
How did the meeting go? Any surprises? Been in shoes similar to yours and it's no fun. Good luck.

 

[Brat]

Here they go again!

Boeing did something very similar back in the day. They created an index that supposedly measured the potential of an employee and laid off many with low scores. Need I say it had an adverse impact on older workers? That case consumed file drawers at W/H in Seattle for years. As I recall there was a negotiated settlement.

 

[FUEGO]

DW was the beneficiary of huge amounts of hiring when her megacorp came to town to set up a Center of Excellence (that is exactly what they call it). They hired her in a wave (that is what they called it) of hiring. The pay was usually 1/3 to 1/4 what they were paying in Big Fancy City USA. Productivity appears to be the same and most people that relocated love the low (relative) cost of living and were surprised that the local workers were relatively educated and well spoken, AND still had most or all of their teeth.

Of course one huge cost savings for DW's megacorp was laying off 40-something and 50-somethings in Big Fancy City USA and hiring 21-23 year olds fresh out of college. Which appears to have worked well for them, since sometimes you just need a warm trainable body (with some education and common sense) to push buttons on a computer and speak some modicum of English.

I imagine Boeing will have a similar experience with the fine residents of South Carolina and Missouri.

 

[Mulligan]

Hi, "Going-Early" works for the same company and gave me a good tip. I was in error on the 50% hit to monthly pension. If you are laid off (voluntary or not) the penalty is much less.

so $2900 becomes ~ $2650 vs. $1500 like I thought before. That 50% is if you just up and quit. My error.

Nice to have "errors" work in your favor for a change doesn't it! I am glad for you that the penalty is not so penal, now. My dad had to slog through 3 years chasing his pension after his plant closed down. He had to rent an apartment across state, and then travel home for the weekend. I hope it all works out the best for you.

 

[supernova72]

Supernova,
How did the meeting go? Any surprises? Been in shoes similar to yours and it's no fun. Good luck.

The meeting went pretty well and was in a webcast format out of Chicago. The VP of HR, our CIO, and the Operations director were present.

The first hour was an update of progress made thus far for the "Future if IT". More information on centers of excellence and some rough estimates on number of those new centers in STL and SC.

It looks like a small % of those spots in STL and SC will be filled with relocations from So Cal and Puget Sound (Seattle). So without saying it, the rest of the statement of work will be filled by hiring locally. I"m guessing level 1's and 2's from the local colleges given cost reduction is one of the main goals here.

It was made very clear that the Voluntary Layoff Pkg (VLO) would be a one time deal.
If you want to be considered you need to submit your name by 5/31 but there is no guarantee you'll be accepted of course. The one drawback of VLO is no recall rights vs. being laid of the involuntary method.

What is not clear yet is for those selected for relo (who don't take the VLO) how your benefits will or will not transfer to the new location or if there would be a pay cut. You could be offered a job at a lower level than you have in Seattle or So Cal. Also the pay scales in those in STL and SC or lower within the same level.

They will hold separate sessions to share the benefit impact for your particular plan (Heritage Seattle, Heritage So Cal, etc.).

I may have pointed out that another poster (Thanks! "going-early") shared with me that if you are laid off and within 6 years of 55 the pension penalty is much less so since I call into that camp at 52 yrs old, that was good to know! I don't recall what is special about the "within 6 years of 55" but I'll take it

I'm trying not to take it personally but it does sort of feel like I"m on mile 24 of a marathon and someone is telling me I may have to pull of the course before I get to mile 26.2. I'll keep that faith...

 

[target2019]

If you were thinking of retiring to a much hotter climate, I guess this is your opportunity to put in for the transfer. You could continue to build pension and then just retire at your own speed.

I have been to Charleston SC several times in the past 5 years. There are actually opportunities there since companies move to take advantage of several factors. However, the climate is not something we would choose.

I am in a tighter spot, as I have been furloughed from similar megacorp. I actually got in at your present age. So now I am 60. If I had your situation I would take a VLO and stay put, so long as the area you live has potential for some career sustenance. The outcome is uncertain, but you do need to take action, IMO.

With your background you will definitely find IT work as the economy continues to come back. It won't be at the level you are at now, but let's face it, the world changes like this every recession.

 

[Felix Mulier]

The meeting went pretty well and was in a webcast format out of Chicago. The VP of HR, our CIO, and the Operations director were present.

The last meeting I was at like this, mymegacorp guys said they had absolutely no intention of filing for bankruptcy. They did so within a matter of weeks!

It was made very clear that the Voluntary Layoff Pkg (VLO) would be a one time deal. If you want to be considered you need to submit your name by 5/31 but there is no guarantee you'll be accepted of course. The one drawback of VLO is no recall rights vs. being laid of the involuntary method.

Is there a termination "package" for those who don't volunteer? We had x# weeks' pay for every year worked, fairly decent "retraining" allowance, paid medical benefits for IIRC 6 months. Something to work into the equation maybe.

They will hold separate sessions to share the benefit impact for your particular plan (Heritage Seattle, Heritage So Cal, etc.).

Make sure you go to every kind of session they have, get handouts, take notes, and keep track of any questions you want answers to. Arm yourself with the facts. If you don't mind my saying so, I'd stay away from those employees who will get really negative (if they're not already) - they can be like a toxin.

I'm trying not to take it personally but it does sort of feel like I"m on mile 24 of a marathon and someone is telling me I may have to pull of the course before I get to mile 26.2. I'll keep that faith...

But that's really hard, isn't it? I feel that. My advice - this is not your fault. This whole thing was beyond your control or even influence. Take comfort in the fact that you gave it your best all the while you were there. Your situation is not because of anything you did wrong.

There is life after megacorp.

 

[MBAustin]

My former megacorp established an IT center of excellence in SC also (outside of Columbia) about 6 years ago or so. It was piggybacked off of an existing division at the same location. When I RE'd in late 2010, they were still struggling to find qualified people for many of the jobs, and had significant performance issues with many of the people they did hire (skills not up to the level of the folks they replaced). This whole concept is not as easy as senior management thinks it is. And unfortunately a lot of people who have done great work are severely penalized in the process. Bah, humbug.

 

[ChocoKitty]

What exactly is a Center of Excellence supposed to be/do? My former Megacorp established one too while I was there, in India. Last I heard, they're still struggling with quality issues five years later, yet they want to move more jobs there to cut costs. I still don't know what the CoE was supposed to contribute.

 

[supernova72]

What exactly is a Center of Excellence supposed to be/do? My former Megacorp established one too while I was there, in India. Last I heard, they're still struggling with quality issues five years later, yet they want to move more jobs there to cut costs. I still don't know what the CoE was supposed to contribute.

CoE's..."grouping like skills or functions in a common location to improve communication between staff..." or something close to that.

It's all about being more productive and reducing costs of course and given we live in a high-tech area (believe it or not), moving staff to the mid-west and the SE will help achieve that.

Ironically enough today in a local Seattle paper IT salaries were ranked 3rd highest in the country. That was a bit surprising at $110K a year.

Washington tech pay averages $110k, third highest in U.S. | Brier Dudley's blog | Seattle Times