Many times, companies offer buyouts before they pull the trigger on layoffs, which presents employees with a tough question: Should you take the buyout, get some cash and exit on your own terms, or pass it up and hope you won’t be one of those receiving a pink slip.
Unless you’re particularly good at reading tea leaves, it’s hard to know how things will play out. In December, Dell offered buyouts to an undisclosed number of employees under what it called a “voluntary separation program,” part of an effort to revamp the company, which had recently been taken private. It was a sure hint that layoffs were coming, as indeed they did by February.
But at the time of the buyouts, just which employees were being targeted? Bob Kantor, an IT leadership and management consultant at the New City, N.Y.-based Kantor Consulting Group, says it’s sometimes difficult to assess who will go, making whether or not to take a buyout a highly personal decision. “It’s a somewhat complex situation, and there certainly isn’t a general guideline,” he says. “It comes down to the individual — where someone is in their career and their interest in making a change.”
One thing to ask yourself, Kantor says, is whether the offer is the opportunity you need to motivate taking a new course. “Ask yourself what you really want to do, should you have already moved on, and does the presence of a buyout offer motivate you to make a change.”
Large-Scale or Surgical Layoffs
Another thing to consider is the wider goings-on at your company. Usually layoffs fall into two categories: large-scale and surgical, observes Donald Asher, a Reno, Nev., career consultant and author of Cracking the Hidden Job Market. “Ask yourself if the buyout offer is a part of a massive layoff of a class of employees at the company, or if they’re a surgical move to get rid of dead weight.” If your job is redundant or the company sees you as dead wood, you should be able to read the signs.
No Way Out
The big problem comes in deciding if you can find a similar job elsewhere, and if you can do it for an acceptable salary. If your skills and certifications aren’t up to date, Asher warns, you may find yourself facing a lesser compensation package. “It can be cruel out there for people whose skills aren’t up to date,” he says.
Money, Money, Money
Finally, if you are considering an offer, bear in mind that timing can matter, Kantor says. Early offers are usually much better than later ones, and also better than the severance packages for those laid off. The earlier offers are meant to be serious incentives to leave. “They want to encourage as many people as possible early on to take the deal so they can minimize layoffs,” Kantor explains. “Of course, if you need the job, there’s no choice but to wait it out.”