Scaling back work in times like these?

[bright eyed]

Arg, found out we may have to do lay-offs soon and I am dreading the ramp up of work that looms around the corner for me.

I've been at my current job for almost a decade and nearly fell into a deep well of depression from the amount of work I was carrying. Finally they threw me a lifeline and we hired additional staff - who I've spent the last year training, grooming. I've actually been able to take a few vacation days, relax and there are things "running" on their own without me now.

However, if the cuts are as bad as we think they may be, my lifeline may be cut again and I'm not sure I can go back "there."

I've also started a grad school program for working ppl and am loving it. I don't want to give that up either.

So - would love your feedback to see if my ideas are born out of self preservation or just insanity.

I'm thinking if we do end up doing lay-offs, the only way to keep myself from doing a deep dive to overkill work land is to reduce my role. I'd scale back to 24-30 hours or so and hire someone else at a much lower rate then the current person (the job would not be the same as the current and the current person wouldn't fit the skills needed). Between the savings from me cutting back and the lower rate person then we'd be just slightly above my salary range now, so think I could win the argument to hire someone.

Is this a dumb idea? I'd have to cut back my retirement contributions for a year or two, but I'd be able to finish my degree faster since I would have less work.

I'm trying not to freak out...

 

[DangerMouse]

When calculating hiring someone at a lower rate, don't forget to factor in the cost of benefits into your calculations. Even if they have dropped 401k there are always the medical costs etc. It is usually better to have a 1.0 employee than 2 .05 employees. Also depends if they are trying to cut headcount or budget. Thinking ahead, by dropping your hours and taking on someone else, if they are going to do further cuts at some later date, are they going to see your area as being overstaffed?

How much longer are you planning on staying at your current position? The degree you are doing - how is it relevant to your career? Do you love the company you are working at? Could you take a layoff and go to school full-time?

 

[FIREd]

Unfortunately. it's the kind of world we now live in.

DW's company has been laying off too, yet the work load has not gone down. They now require employees to work 7 days a week (for no additonal pay) and they schedule mandatory meetings on Sundays (teleconference is not an option so she has to go in). This morning she got a email scolding her for not answering an "important" call on her blackberry at 10:30pm last night (she was sleeping, apparently it's not allowed anymore either). The company's CEO made it abondantly clear that anyone is replaceable and that if you don't like it or can't take it, you should feel free to walk out. So at this time, she'd rather not rock the boat too much. A request for role reduction would, in her case, certainly be seen as a lack of team playing ability by management and would probably result in her losing her job.

So she decided to hang in there. Given the state of the economy, she doesn't want to take a chance and find herself looking for a job amid the worse job market in decades. We are just 2-3 years away from FI, so we will soon have the upper hand and more control over our future. FI has now become the light at the end of a very dark tunnel.

My job isn't much better either right now. Hopefully we'll reach FI before reaching insanity...

 

[bright eyed]

How much longer are you planning on staying at your current position? The degree you are doing - how is it relevant to your career? Do you love the company you are working at? Could you take a layoff and go to school full-time?

I'm not sure how much longer I can last! Working from home is driving me a bit nuts, but again, my options are limited as a commute would be challenging for me as well (and you know traffic in southern CA is not appealing!). So I'm trying to count my blessings on that one.

I do like the work I do and the people, our mission. I think some recent decisions have made me far less invested however, so I'm calculating what benefit it is to me personally if I feel increasingly under-appreciated. I've sacrificed a lot over the years and not sure I want to do it again.

I don't think full time school is an option since I have kids and wouldn't want to make them eat rice and beans with me and cut out all their activities (which cost moola that i don't want to finance with student loans!) - working allows me to cut back my student loan obligations.

The degree is very relavant to my career so aside from enjoying the classes, I know it will help me have more flexibility and freedom in the future.

When the economy improves, I'm sure our funding will too - so there is definitely opportunity to ramp back up in the future without the overkill of hours and I'd be done with school by then too...

 

[RunningBum]

We're ending a contract with a small group that helped support one of our products, the main one I work on, so I'll have to pick up that slack. And, another guy in my dept is taking a retirement package (that I didn't qualify for, rats!), and we're having a meeting next week to talk about who picks up his stuff. I'm wondering if I'll get heat to go back full time. My first answer to that will be No. If that doesn't take, my next silent answer will be "You can pay me full time, but you can't force me to work full time".

The danger of switching to part-time is the reverse of the above can be true. They will pay you part time wages, but you may get sucked into working nearly full time hours. I've been pretty good about avoiding that myself, though this has been a bad week already.

 

[DangerMouse]

The other reason I would be wary of volunteering for any reduction in hours and paycut, is there is a good chance you will get your salary cut at some time and who has ever heard of anyone who is part time who manages to get away with working just the hours they are compensated for.

Truthfully, the economy being the way it is, and if you need the job you may just have to suck it up. Can you defer your study for now to relieve the pressure?

 

[LOL!]

In March 2008, I cut my hours substantially so that my salary is about half, but I still qualify for benefits including health care, life insurance, 401(k) plan. I dumped my bucket onto a qualified subordinate who took over almost all my tasks. I have new projects that benefit the company bottom-line that I am the best qualified to work on, so while I can probably be let go at any time, it would be hard on customers if I did go. Basically, I got out of managing people and back into the skunk works to have some fun.

I had planned this between me and my boss since the summer of 2007 with the March date set.

It has all worked out rather well I think. I do get a lot of teasing because of my work hours. People see me arriving late and going home early on the days I go to the office. I am available by e-mail almost all the time though.

So I think it is possible to do this, but I don't think my circumstance is the norm. We are financially independent. My spouse works at at good job such that if I lost my job, we would switch to using her employer's health care plan (more expensive) instead of the one offered by my employer (less expensive).

I do get interesting hints that my company would not mind if I cost them a lot less money, but many people are getting those hints. An example would be a new project is starting that I would've been a leader on in the past. I don't get invited to any of the formative meetings nor consulted for ideas. But I sort of don't care about that anymore. It is strangely satisfying when such a project flops though a few months later.

So I guess it sort of comes down to the following: If you ask for less hours, are you indispensable enough to force that on your employer without them letting you go? If they let you go, can you survive?

 

[NW-Bound]

... We are just 2-3 years away from FI, so we will soon have the upper hand and more control over our future...

Wow! That's impressive, given that you both have not been working for very long (10 years?).

Anyway, I have the impression that you are not with megacorps, which do not apply pressure like smaller companies whose business is more volatile. Megacorps would just lay off people, but they do not breathe down the neck of the survivors. At least that was my experience working for corporations with 50,000 to 120,000 employees.

 

[FIREd]

Wow! That's impressive, given that you both have not been working for very long (10 years?).

Anyway, I have the impression that you are not with megacorps, which do not apply pressure like smaller companies whose business is more volatile. Megacorps would just lay off people, but they do not breathe down the neck of the survivors. At least that was my experience working for corporations with 50,000 to 120,000 employees.

You are right, we work for small companies. DW started working in 2000 and I in 2001. We started saving lots of money from day 1. Our current situation is very sweet, financially speaking. Unexpectedly high income and great benefits yet relatively low costs of living and low taxes. Ideal to build our net worth quickly. And that's why we intend to milk it for all it's worth. So we keep our eyes on the prize (and our mouths shut) and plug along. We now save 3 years worth of living expenses for each year we stay put. And that doesn't even include stock options that could move our FIRE date up considerably. So even if the stock market does not improve much from here 'til 2012, our portfolio should reach about 25 times annual living expenses sometime in the next 3 years (we are at 17 times right now). Now, we are still young and it still won't be enough to ER for good (ideally we would like to have 33+ times annual living expenses before pulling the plug), but it sure opens up a world of possibilities: semi-retirement, scaled back hours, full retirement for one of us, working just enough to pay the bills and let our portfolio grow, etc... And more importantly, our portfolio should generate enough income to cover our basic expenses and more, so it would allow us to survive a long term unemployment scenario without making irreparable damages to our financial future.

 

[NW-Bound]

You are right, we work for small companies. DW started working in 2000 and I in 2001. We started saving lots of money from day 1. Our current situation is very sweet, financially speaking. Unexpectedly high income and great benefits yet relatively low costs of living and low taxes. Ideal to build our net worth quickly. And that's why we intend to milk it for all it's worth. So we keep our eyes on the prize (and our mouths shut) and plug along. We now save 3 years worth of living expenses for each year we stay put. And that doesn't even include stock options that could move our FIRE date up considerably...

Excellent! I am happy to hear that one does not have to be in high cost-of-living areas like Silicon Valley to get to work for small growth companies with stock options, particularly when the options work out.

Imagine people who work hard for little companies that go belly up. Yours truly got paid with stocks, not options, that became worthless. Oh well, it's a life enriching experience, but now I only want something I can convert into FERNs (Federal Reserve Notes or "greenback") at a click of the mouse if I smell anything fishy.

 

[FIREd]

Excellent! I am happy to hear that one does not have to be in high cost-of-living areas like Silicon Valley to get to work for small growth companies with stock options, particularly when the options work out.

Imagine people who work hard for little companies that go belly up. Yours truly got paid with stocks, not options, that became worthless. Oh well, it's a life enriching experience, but now I only want something I can convert into FERNs (Federal Reserve Notes or "greenback") at a click of the mouse if I smell anything fishy.

We both worked several years for small companies that went belly up. I accepted a lower salary for stock options "that could be worth a fortune when the company goes public later this year"... Alas, It was post tech bubble and the stock market wasn't conducive to an IPO... The company shut down a year later when we ran out of funding. My options became worthless but since I never exercized them, I didn't lose any money unlike some of my colleagues. Similar story for DW: she received a great number of stock options with a miserly strike price of 1 cent/share (she went in early). The company was doing great until they lost a key contract (and source of funding). Her options became worthless too. So we've been 0 for 2 in the stock option game.

Hopefully this time it is different!

 

[bright eyed]

So I guess it sort of comes down to the following: If you ask for less hours, are you indispensable enough to force that on your employer without them letting you go? If they let you go, can you survive?

I'd like to think so...but yes, especially if we have to go back to the drawing board...I'm the only one who could usher in any transition of my roles to a new person...this obligation has kept me here a long time, just thought i was in a place soon where I felt more free to make choices for myself (selfishly!).

I think I have some time to decide, although bad news may be just around the corner with some of the uncertainties with the economy causing funders to behave in new and unusual ways...

 

[Milton]

Arg, found out we may have to do lay-offs soon and I am dreading the ramp up of work that looms around the corner for me.

I've been at my current job for almost a decade and nearly fell into a deep well of depression from the amount of work I was carrying. Finally they threw me a lifeline and we hired additional staff - who I've spent the last year training, grooming. I've actually been able to take a few vacation days, relax and there are things "running" on their own without me now.

However, if the cuts are as bad as we think they may be, my lifeline may be cut again and I'm not sure I can go back "there."

From your description above I would be more worried about the prospect of your employer deciding to save the most money by letting go the experienced (and highly paid) worker. You have done a great job of training your subordinates, and they can manage without you ...

I don't know your situation, and perhaps you have some ownership stake or are otherwise guaranteed job security. Hope that I am wrong and that your job isn't at risk.

 

[bright eyed]

From your description above I would be more worried about the prospect of your employer deciding to save the most money by letting go the experienced (and highly paid) worker. You have done a great job of training your subordinates, and they can manage without you ...

I don't know your situation, and perhaps you have some ownership stake or are otherwise guaranteed job security. Hope that I am wrong and that your job isn't at risk.

They don't have complete confidence in the other person which is why that is the option is what it is for now. Also, because it's a small organization and I am one of the most senior people, I can wear many hats and cover whatever needs to get done, which is more helpful in times like these...I'm just weighing the personal costs in doing this again!