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

[supernova72]

At my megacorp in Seattle WA, we were recently informed about a new direction within IT called "The Future of Boeing IT". The attached story in the Seattle Times describes pretty accurately (Centers of excellence, relocations, etc).

Boeing to shed 1,500 IT jobs here over next three years | Business & Technology | The Seattle Times

A few unanswered questions are looming in regards to if you are identifed to move from Seattle to St Louis or Charleston SC:

• Will the company pay relocation costs?
• Do your "Heritage Benefits" follow you (pension, retiree mecial).

Note: Charleston SC has a separate benefit structure (no pension, no retiree medical).

It's not good news for many of us "senior" employees (25+ years) and are located in Seattle. I'm only 52 so can't take the early retirement which is 55 minimum.

I'm still internalizing this and want to be flexible. Having said that I really don't have a plan B yet. 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.

FYI, for me taking the "voluntary layoff" reduces my pension by ~ 50%. Ouch (from $2900 a month to about $1500). Thanks.

 

[timo2]

That's a tough one. without knowing any other of your circumstances, I would hang on and see if you can make it the 3 years. I've been through similar to this twice, and each time I got all wound up, and then either management tweaked their plans, or enough other people took early retirement, or took transfers. So if it is possible in this case, one option to consider is the strategy of seeing if you could outlast the others.

 

[supernova72]

That's a tough one. without knowing any other of your circumstances, I would hang on and see if you can make it the 3 years. I've been through similar to this twice, and each time I got all wound up, and then either management tweaked their plans, or enough other people took early retirement, or took transfers. So if it is possible in this case, one option to consider is the strategy of seeing if you could outlast the others.

Thanks Timo2. Good point on my other circumstances. My first "Hi I am" would have been a good attachment link so here my current situation below on those specifics (savings, budget, spouse N/A, etc.). Cheers.

http://www.early-retirement.org/forums/f26/52-and-looking-at-er-in-2015-super-dreamer-64490.html

 

[timo2]

Thanks Timo2. Good point on my other circumstances. My first "Hi I am" would have been a good attachment link so here my current situation below on those specifics (savings, budget, spouse N/A, etc.). Cheers.

http://www.early-retirement.org/forums/f26/52-and-looking-at-er-in-2015-super-dreamer-64490.html

Thanks for the link. My 2cents, based on my experience (I was laid off in the Reagan recession of the early 80's, and dodged two others): Since they are penalizing you on your pension for taking the voluntary layoff, don't do that. do whatever it takes to stay on. If they transfer you, go wherever until you can afford to retire. And downsize your lifestyle immediately. If you do get laid off, you'll have to do it anyway, so downsize on your terms. Being laid off really hurts, and I hope you don't get laid off, and can stay on until you can get your pension.

 

[keegs]

At my megacorp in Seattle WA, we were recently informed about a new direction within IT called "The Future of Boeing IT". The attached story in the Seattle Times describes pretty accurately (Centers of excellence, relocations, etc).

Boeing to shed 1,500 IT jobs here over next three years | Business & Technology | The Seattle Times


A few unanswered questions are looming in regards to if you are identifed to move from Seattle to St Louis or Charleston SC:

• Will the company pay relocation costs?
• Do your "Heritage Benefits" follow you (pension, retiree mecial).

Note: Charleston SC has a separate benefit structure (no pension, no retiree medical).

It's not good news for many of us "senior" employees (25+ years) and are located in Seattle. I'm only 52 so can't take the early retirement which is 55 minimum.

I'm still internalizing this and want to be flexible. Having said that I really don't have a plan B yet. 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.

FYI, for me taking the "voluntary layoff" reduces my pension by ~ 50%. Ouch (from $2900 a month to about $1500). Thanks.

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.

 

[racy]

At my megacorp ...we were recently informed about a new direction .... Centers of excellence....

Yep, been there, done that. The "centers of excellence" is ripe for Dilbert:
http://dilbert.com/dyn/str_strip/00...000/30000/5000/800/35832/35832.strip.zoom.gif

 

[SecretlyFI]

My megacorp announced the exact same thing in February, but for Atlanta not Charleston. In parallel, of course, with continued offshoring. Pensions go with you, but you get a measly 7500 relo stipend. Doesn't even begin to cover the moving cost, sales commission on your house, effect on your spouses career and your kids to switch schools. All for the priveledge of never getting another raise because you'll be above the salary grade for the new geography. People who are close to retirement are leaving their families where they are and finding cheap apartment living to ride out the 2-3 years they have left. Others are declining and taking the standard severance. The program was announced to be done in waves over the next 3 years so I'm sure many will leave on their own rather than be sitting ducks. All part of megacorp's master plan since for those people they don't pay severance, relo or anything.

Good luck to you and do your best to hang on and preserve the pension. Things may be negotiable on an individual basis. I wouldn't ask the question in a townhall format but I have colleagues that negotiated with their management team to let them wait an extra 6 months to move. Maybe you can get those 3 years credited to your years of service by agreeing to go there and stay on for x amount of time. There may be possibilities that are not evident at first glance.

 

[Midpack]

Painful, but not altogether surprising unfortunately, the trend began decades ago in some industries as we all know. An chance it's a tactical move by Boeing to get tax breaks and/or other incentives from state/local government to stay? That's not unusual either when closed door negotiations don't achieve a corporations desired result...

 

[going-early]

You may be in better shape than you think. I work for the same Megacorp but on the east coast. Have you run your accrued pension numbers showing that you would be laid off? Theres a provision in both the hourly and salary plans here that remove the early penalty if you're laid off within 6 years of your 55th birthday. You would only lose the 3 years accumulation to 55. There is also a severance package of 1 weeks pay for every year of service up to 26 weeks. They may have that there as well. You would also be elegible for unemployement. At that point you may end up with only needing to self fund your retirement for 1 year until you hit 55.

 

[Semiretired2008]

My wife went through almost the same thing in the 90s. In her case relocation was only offered to high ranking managers with specialty skills - she was not in that group so we went to plan B. Estimate where she was with seniority for the amount of cuts that were coming with the reductions and use that as a way to stretch her decision deadline. She ended up in the last group of 80 people that were let go. The company was very straight forward with the level and direction of the cuts each month - it stretched over two year. That two years got her to a higher retirement plan coverage level, which was what we wanted. We took a chance and it worked out, but it took us taking a chance - there were others that took the same chance and it did not work for them.

I guess what I am saying is listen, analyze your position and determine your options, weigh whether or not the chance is worth it and go from there... Remember if an offer does come for relocation you will probably have to accept it. If you can make it to the last group cut - will the 55 option be available? Will waiting increase your retirement check? - a lot of questions - all depends on how open the company is being with the answers. My wife's company was very open - let us hope so is yours...

 

[Texas Proud]

It is not unusual for companies to move to lower cost areas.... heck, my mega moved a big number to India... nobody was able to transfer... not an option (like anybody would have taken it anyhow).... I would say that them keeping the jobs in the US is a good thing... not good for you, however..


I do not know how they can have a separate benefit structure.... if they are part of the same company I thought they had to have the same benefits.... something else is going on here...

However, if you have already earned the benefit, they can not get rid of it... IOW, you have what you have already earned..... it might not grow any more, but it can not be cut..... think of it as if you left Boeing and went to work for XYZ.... Boeing can not just say 'well, you started work somewhere else so we don't have to pay you your benefits'....


I would bet that the drop in your monthly pension is due to you taking the money sooner.... unless the drop is because your $2900 was based on working another 13 years.... it is not clear in your post.... if that is the case, you had not yet earned that $2900 pension....

 

[ziggy29]

Would the last person remaining in the middle class please turn off the light (due to budget cuts) on their way out?

 

[Midpack]

It is not unusual for companies to move to lower cost areas.... heck, my mega moved a big number to India... nobody was able to transfer... not an option (like anybody would have taken it anyhow).... I would say that them keeping the jobs in the US is a good thing. That's not entirely clear.

Boeing’s Chicago-based chief information officer, Kim Hammonds, in March unveiled a three-year restructuring plan for the IT division that included migrating work from Southern California and the Puget Sound region to two new “centers of excellence” in Missouri and South Carolina.

The plan also included outsourcing more IT work, with a goal to increase the percentage of work outsourced from 45 percent to more than 50 percent. And some IT workers who remained in the Puget Sound region would be reclassified to lower-level positions.

And...

I do not know how they can have a separate benefit structure.... if they are part of the same company I thought they had to have the same benefits.... something else is going on here...

May not be a good long term plan to retain employees, but of course they can.

 

[cranberryjoe]

I do not know how they can have a separate benefit structure.... if they are part of the same company I thought they had to have the same benefits.... something else is going on here...

I don't know about this particular situation, but at my megacorp some people have different benefit structures and different pension plans because they came on board through acquisitions of other companies. If you move to another location, your pension plan moves with you as far as I know.

 

[imoldernu]

Yep, been there, done that. The "centers of excellence" is ripe for Dilbert:
http://dilbert.com/dyn/str_strip/00...000/30000/5000/800/35832/35832.strip.zoom.gif

+1
For us dinosaurs, "centers of excellence" is reminiscent of a number of budget slashes experienced in my own working days... 1989 and further to the 1950's. Never even heard the term 'buy out" in those days. The last cutback I recall was under the cover of "forward looking" improvements called "Management by Objectives". Further back, my own mom and dad were affected by the movement of the entire textile industry from New England to the "south", where labor costs were very low... 1940's and '50's.

Deja vu all over again...

 

[supernova72]

Yep, been there, done that. The "centers of excellence" is ripe for Dilbert:
http://dilbert.com/dyn/str_strip/00...000/30000/5000/800/35832/35832.strip.zoom.gif

Thanks. I had not seen that Dilbert!

 

[supernova72]

Thanks for the link. My 2cents, based on my experience (I was laid off in the Reagan recession of the early 80's, and dodged two others): Since they are penalizing you on your pension for taking the voluntary layoff, don't do that. do whatever it takes to stay on. If they transfer you, go wherever until you can afford to retire. And downsize your lifestyle immediately. If you do get laid off, you'll have to do it anyway, so downsize on your terms. Being laid off really hurts, and I hope you don't get laid off, and can stay on until you can get your pension.

Thanks for the input. When this news was first being discussed I started looking for other opportunities within the company outside of IT. I needed to restructure my resume' a bit to do that given half my time has been in IT.

i've had one interview thus far and keeping my fingers crossed. It's for a senior strategy analyst position within another business unit. Cheers.

 

[supernova72]

You may be in better shape than you think. I work for the same Megacorp but on the east coast. Have you run your accrued pension numbers showing that you would be laid off? Theres a provision in both the hourly and salary plans here that remove the early penalty if you're laid off within 6 years of your 55th birthday. You would only lose the 3 years accumulation to 55. There is also a severance package of 1 weeks pay for every year of service up to 26 weeks. They may have that there as well. You would also be elegible for unemployement. At that point you may end up with only needing to self fund your retirement for 1 year until you hit 55.

Oh, I need to do that. I ran the numbers but did not check laid off just input the data as if I severed employment. The pkg is 26 weeks pay max yes.

I will rerun the numbers. Thanks!

 

[supernova72]

It is not unusual for companies to move to lower cost areas.... heck, my mega moved a big number to India... nobody was able to transfer... not an option (like anybody would have taken it anyhow).... I would say that them keeping the jobs in the US is a good thing... not good for you, however..


I do not know how they can have a separate benefit structure.... if they are part of the same company I thought they had to have the same benefits.... something else is going on here...

However, if you have already earned the benefit, they can not get rid of it... IOW, you have what you have already earned..... it might not grow any more, but it can not be cut..... think of it as if you left Boeing and went to work for XYZ.... Boeing can not just say 'well, you started work somewhere else so we don't have to pay you your benefits'....


I would bet that the drop in your monthly pension is due to you taking the money sooner.... unless the drop is because your $2900 was based on working another 13 years.... it is not clear in your post.... if that is the case, you had not yet earned that $2900 pension....

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!

 

[supernova72]

You may be in better shape than you think. I work for the same Megacorp but on the east coast. Have you run your accrued pension numbers showing that you would be laid off? Theres a provision in both the hourly and salary plans here that remove the early penalty if you're laid off within 6 years of your 55th birthday. You would only lose the 3 years accumulation to 55. There is also a severance package of 1 weeks pay for every year of service up to 26 weeks. They may have that there as well. You would also be elegible for unemployement. At that point you may end up with only needing to self fund your retirement for 1 year until you hit 55.

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...

 

[Texas Proud]

I don't know about this particular situation, but at my megacorp some people have different benefit structures and different pension plans because they came on board through acquisitions of other companies. If you move to another location, your pension plan moves with you as far as I know.

Usually when a company acquires another company.... that second company is not closed... it may stay as a separate company even if the name changes... I know this is one way to keep acquired employees on an old pension plan... also, since it is a separate company, any new employees of that company should be on that old plan...


It might be that in one place there is a union and in another there is not... I forgot about the union exception... something like if people are represented by a union, they can have a separate pension plan that others in a company do not have to be offered...

Maybe someone with more knowledge about this will chime in.... my info is only based on things I have read.... and a long time ago at that....

 

[MooreBonds]

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...

Just to be safe, it would be wise to get an official clarification from HR in writing stating that if they offer you a relocated position in another city but you decline, it's still considered that you were laid off, and not some other creative term that included some severance.

(however, as a St. Louis resident, it is a pretty nice place to live and work...just sayin! )

 

[Texas Proud]

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!

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...

 

[Live And Learn]

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.

 

[explanade]

"Centers of excellence"

We see who learned to use doublespeak.