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Old 06-01-2012, 12:16 PM   #41
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That may very well be the case.

In 2009, they offered packages to the directors and VPs in September and did not have them retire until the end of January the following year. In addition, the company must have some unwritten policy about avoiding layoffs during the holidays, but there's always a first time.
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Going into the next fiscal period will not matter.

Once the company has anounced the program they will do an expense accrual to cover all costs of the re-org...people, real estate, etc.

What often happens is that when they do release less than stellar financial results, quarterly or yearly, they choose to announce a staff reduction as a way of responding to the results.

They take the expense accrual up front-along with any other not so good financial news for that period. It gives them a clearer shot to show quarterly improvement next time around.

Just to make clear my post... they would tell the people that they are being let go and when... as required by law.... they do not have to let them go during the holiday, or even in Jan for that matter.. I was just trying to point out that the info to the affected people will happen.. so your DH would know in say late Oct if he was on the list or not... even if he had to work until Apr or later to get the package...
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Old 06-01-2012, 12:44 PM   #42
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Just to make clear my post... they would tell the people that they are being let go and when... as required by law.... they do not have to let them go during the holiday, or even in Jan for that matter.. I was just trying to point out that the info to the affected people will happen.. so your DH would know in say late Oct if he was on the list or not... even if he had to work until Apr or later to get the package...
I understand what you're saying. Anything could happen......or not.

In 2011 the company offered a VLO. You had to commit by July and offloads took place in Sept/Oct. The problem is the severance was piled on top of 3/4 of a years salary greatly reducing the "benefit" of severance due to increased income taxes. I think they might have gotten a few more "volunteers" if the offload date had been early into the next year. We still have not figured out why the heck they did it that way, especially because it did not at all follow what they had done with the directors and VPs. It was not an option for DH because he had not yet reached the "magical" age of 55.
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Old 06-01-2012, 01:34 PM   #43
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Many companies will give the option of how to structure buy outs to meet you personal financial/tax situation. It really is of no consequence to them because they have in all probability accrued the expense.

The ONLY time that this becomes an issue-and I have seen in happen with Nortel-is when you delay the payment and the company goes into bankruptcy. I know of a number of people who lost out on a good portion of their negotiated severance because they delayed the payment. They became unsecured creditors and lost every dime.

Mine allowed me to take salary continuance for a period, then the balance as a large lump sum in January. It allowed me to avoid some tax issues.
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Old 06-01-2012, 03:17 PM   #44
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Many companies will give the option of how to structure buy outs to meet you personal financial/tax situation. It really is of no consequence to them because they have in all probability accrued the expense.
I am hearing what you are saying, I really am; but that was not the case with DH's company last year. If you took the VLO you were required to offload in Sep/Oct.
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Old 06-01-2012, 04:02 PM   #45
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I am hearing what you are saying, I really am; but that was not the case with DH's company last year. If you took the VLO you were required to offload in Sep/Oct.

Do you mean that you had to take a lump sum.... no other option?

From your post it seems that you are talking about leaving... to me, leaving and getting continued payments are two different things...

When I was let go from my mega... all severance was paid as normal salary over however many months it took... you did not get an option for a lump sum...
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Old 06-01-2012, 04:52 PM   #46
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Ok. We know the company. It's big, too big to fail. Here is my analysis.

You can search for a graphic at Morningstar that shows the DoD budget from 1985 to 2022. Of course the future years are a projection. It's no longer 5-10-25% increases year over year. Those were the times that brought me in. It is not a question of when, but how cuts will continue. I saw this process beginning in 2007, about a year or two after I hired on. It's been going on and will continue, in my opinion, for a few years.

There will need to be a package, as they have already cut many contractors, VP's, production facilities that went EOL with no contract. The bottom performers have been, and will be, let go. The stock price has held up well, as megacorp has discovered that the shareholders and analysts love increased profits, even if it means job loss. Go figure.

I witnessed this same phenomena in manufacturing in the 1990's. Chainsaw Al.

Middle management will receive a thrashing. The company is top heavy with senior level and higher people. Managers where I toil received a demotion last year. The CEO is stepping aside. Icing on the cake: the performance review system was just re-tooled.

I'd say hang on, take the pay, and wait it out. Take the first package, as the next one cold be very cruel.
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Old 06-01-2012, 06:35 PM   #47
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Ok. We know the company. It's big, too big to fail. Here is my analysis.

You can search for a graphic at Morningstar that shows the DoD budget from 1985 to 2022. Of course the future years are a projection. It's no longer 5-10-25% increases year over year. Those were the times that brought me in. It is not a question of when, but how cuts will continue. I saw this process beginning in 2007, about a year or two after I hired on. It's been going on and will continue, in my opinion, for a few years.

There will need to be a package, as they have already cut many contractors, VP's, production facilities that went EOL with no contract. The bottom performers have been, and will be, let go. The stock price has held up well, as megacorp has discovered that the shareholders and analysts love increased profits, even if it means job loss. Go figure.

I witnessed this same phenomena in manufacturing in the 1990's. Chainsaw Al.

Middle management will receive a thrashing. The company is top heavy with senior level and higher people. Managers where I toil received a demotion last year. The CEO is stepping aside. Icing on the cake: the performance review system was just re-tooled.

I'd say hang on, take the pay, and wait it out. Take the first package, as the next one cold be very cruel.
My husband is middle management at the senior level. He was not demoted during the "re-leveling" last year. He would have taken the VLO if he had been 55; he's 55 now.

We also are and have been fairly certain that there will be a package, in spite of executive managements' constant denials (even as recently as last week). Yesterday's statement by the CEO was confirmation that there is a lot of number crunching and "what ifs" being worked right now.

DH does plan on taking the first package as he's ready to pull the trigger.

Just curious. What do you mean, "the next one could be very cruel"?
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Old 06-01-2012, 07:49 PM   #48
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My husband is middle management at the senior level. He was not demoted during the "re-leveling" last year. He would have taken the VLO if he had been 55; he's 55 now.

We also are and have been fairly certain that there will be a package, in spite of executive managements' constant denials (even as recently as last week). Yesterday's statement by the CEO was confirmation that there is a lot of number crunching and "what ifs" being worked right now.

DH does plan on taking the first package as he's ready to pull the trigger.

Just curious. What do you mean, "the next one could be very cruel"?
When I worked for a large manufacturer in the 90's, there were 2 or 3 packages. The first was very advantageous. I don't remember all details, but the employer added years so that the earned pension was significantly better.

When package #1 did not capture enough supervisors and managers (lots of greed in the facility), there was a second round. In every respect what was offered was less. Some were told they would go back to production as their jobs were being eliminated. So, most took the #2 package, as going back on the shop floor with union personnel.

Some actually thought the company would put together a more attractive group of benefits to convince them to leave. They over-estimated their value in a facility that would soon be sold to a competitor.

I read the "no package" memo also. I believe as you do that there will be one (doesn't include me). However, I think when the grandfatherly CEO steps aside the plan might not be as gracious as we would like to think.
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Old 06-02-2012, 09:41 AM   #49
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Your plan is solid and makes sense.

-You are financially prepared for retirement

-You have no issue with remaining on the job for a finite period to determine if some form of severance package is available

-Your plan is to take the first offer that comes along....after all for someone who plans to retire this is just icing on the cake

-You are considering the tax implications.

You will be successful. Just cast your mind to those in middle management who are not financially prepared or who labor under some ill conceived notion that they work for an employer who values service and seniority. Not many of those left.
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Old 06-02-2012, 09:41 AM   #50
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When I worked for a large manufacturer in the 90's, there were 2 or 3 packages. The first was very advantageous. I don't remember all details, but the employer added years so that the earned pension was significantly better.

When package #1 did not capture enough supervisors and managers (lots of greed in the facility), there was a second round. In every respect what was offered was less. Some were told they would go back to production as their jobs were being eliminated. So, most took the #2 package, as going back on the shop floor with union personnel.

Some actually thought the company would put together a more attractive group of benefits to convince them to leave. They over-estimated their value in a facility that would soon be sold to a competitor.

I read the "no package" memo also. I believe as you do that there will be one (doesn't include me). However, I think when the grandfatherly CEO steps aside the plan might not be as gracious as we would like to think.
Interesting theory and you could very well be right. DH will not be hanging around to find out.

Actually, I think they may offer a package with just enough incentive to leave to older, and therefore higher paid employees, hoping to capture remnants of those who rose during the "good ol boy network days" who are still hanging around. Then I would not be at all surprised if they eventually freeze the pension program so that further benefits can no longer be accrued.
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Old 06-02-2012, 10:31 AM   #51
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Your plan is solid and makes sense.

-You are financially prepared for retirement

-You have no issue with remaining on the job for a finite period to determine if some form of severance package is available

-Your plan is to take the first offer that comes along....after all for someone who plans to retire this is just icing on the cake

-You are considering the tax implications.

You will be successful. Just cast your mind to those in middle management who are not financially prepared or who labor under some ill conceived notion that they work for an employer who values service and seniority. Not many of those left.
Trust me, we think about employees who cannot retire all the time. The current pension plan is less than stellar. DH will receive between 25-30% of his current gross (after over 30 years of service) and a pretty penny of that will go to our share of retiree medical premiums. The ONLY REASON he is able to retire is that he maxed out his 401k for decades - not necessarily for retirement, but because the match made it a good investment.

I assume that many older, retirement eligible employees did not realize that they would need a healthy 401k for retirement until a decade or two after it had been offered (after on-line sites were developed by the company so that you could do pension estimates). Couple that with the higher cost of health care and the fact that home values have been decimated and it does not make for a very pretty picture.
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Old 06-04-2012, 10:48 AM   #52
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It will be interesting to see what news, if any, comes from the executive VP this week since the CEO kind of let the "cat out of the bag" last week despite her constant denials.
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Old 06-04-2012, 01:26 PM   #53
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My guess is that if they have crunched the numbers and decided on a strategy, then they will engage HR and move forward. No point in delaying the reorganization.

They will want to realize any cost savings as quickly as possible and rumors will only serve to distract employees and hurt morale. At the end of the day this is about moving forward.
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Old 06-05-2012, 08:37 PM   #54
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To follow up (since I think it makes for an interesting story), it turned out that there were 2 of us in that situation -- although we were in different groups but both worked for the same manager. She was a group leader and I was a programmer.

I told him in April. In late May the head honcho in HR called me in to verify that my manager's story about me volunterring was accurate. It was. Cautioned me to not say anything to others. He denied any knowledge of an upcoming layoff, just said, "Maybe there is, maybe there isn't. Even if it is/is-not, that can change."
Meanwhile, my tasks were winding down and they didn't assign me to any long-term tasks, only short-term ones.
For Louise, it was interesting. They slowly moved the people under her to other group leaders, until she was a leader with no direct reports. Pretty obvious in her case that something's going on!

It wasn't until late August that the layoffs came. The announcement came one morning -- all the managers read the same letter to their people at the same time. Next morning the group leaders came around one-by-one and brought people to the HR conference rooms where they got the personal news.
I was one of the few that was grinning ear-to-ear and urging the HR guy to stop apologizing about laying me off and to hurry up and get to the good stuff -- the golden handshake package.

Everybody's last day of work was the Friday before Labor Day holiday. You don't get holiday pay unless you are on the payroll the day BEFORE and the day AFTER. So they screwed us out of one day's pay.
What was the package?
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