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It's the best way to get a large amount of your workforce to leave voluntarily. No workforce reduction paperwork. No severance packages. Yahoo did it. Nokia did

It's the best way to get a large amount of your workforce to leave voluntarily. No workforce reduction paperwork. No severance packages. Yahoo did it. Nokia did it. In fact, the companies who pull this trick are almost all shrinking and past their prime. But don't worry, IBM has tens of thousands of strap hangers who've been surviving layoffs for decades. The bottom line will get brighter. The future of the company will get darker. It's the Jack Welch school of management.

tomaskafka 10y ago
> It's the best way to get a large amount of your workforce to leave voluntarily. Damn. I finally get it. Thanks!
markbnj 10y ago
Did you read the article though? They are offering 90 days to make the decision, and a month's severance (miserly, imo, but they're offering it). As mentioned in the piece this wouldn't be a very manageable or predictable way to reduce headcount. It's much more likely the motives are exactly what the company said the motives are: they feel like they will be more effective working together. I would likely be one of the employees who said goodbye rather than move, and I don't think this is ultimately a good decision, but neither do I think it's necessary to dig for hidden motives and agendas.
- organsnyder 10y ago
  A month's severance is a lot cheaper than paying for unemployment benefits.
  - jrs235 10y ago
    From my understanding, and this will vary from state to state since unemployment insurance is managed and dealt with by states, not the federal government, employees would still possibly be able to collect unemployment after that month of severance runs out if they are unable to get a new job (and are actively looking) and the unemployment claims will still ding IBM. That month of severance offsets their unemployment insurance rate increase(s). IBM is hoping folks can find a job in the next four months so they don't have to pay any out. Additionally, I would assume, part of accepting the severance might require the employee signing papers which state that the end of employment is voluntary and agreed upon possibly invalidating the employees claim to unemployment and thus hurting IBM's insurance rates. Whether that applies or works will depend on numerous factors, particularly the state the employment occurred in.
    - Consultant32452 10y ago
      The relevant statute is called the WARN Act, Worker Adjustment and Retraining Notification. This requires 60 days notice (or 60 days pay) among other things. https://www.doleta.gov/layoff/pdf/WorkerWARN2003.pdf https://www.doleta.gov/layoff/pdf/WorkerWARN2003.pdf
  - andrei_says_ 10y ago
    Does a months severance pay eliminate the need to pay for 6+ months of unemployment?
    - markbnj 10y ago
      No, in my experience accepting a severance payment does not prevent you from claiming unemployment benefits, however the severance is treated as salary and you can't collect benefits until however many pay periods it represents have passed.
Pokepokalypse 10y ago
This is one way real-estate prices are being driven through the roof in big cities -> Where these company HQ's are located. Workers know. Workers who have worked at remote offices know that the best career-advancing projects happen at HQ where you can schmooze with the executive staff. They know that when the company hits a bad quarter, that the layoffs will disproportionately hit the remote office. They know that the best co-workers will be recruited, and offered little bonuses to relocate to HQ, and they're stuck working at the remote office. It just blows my mind that in the Internet Age: we're still stuck in this 1890's model of "must work at HQ". Even among the very leaders of the information age: IBM, Yahoo, Google, Facebook, and etc. The whole point of the Internet and networked computing was "It does not matter WHERE you are." Unfortunately, to the businespeople who run these corporations, it very much DOES matter. If you're not in their office, they don't control you. So we're all forced to move to these areas where the big corporations have invested in their corporate headquarters. It's the most secure way to work. And you end up paying either through commute-time, or outrageously inflated real-estate prices.

tomaskafka 10y ago

> It's the best way to get a large amount of your workforce to leave voluntarily. Damn. I finally get it. Thanks!

markbnj 10y ago

Did you read the article though? They are offering 90 days to make the decision, and a month's severance (miserly, imo, but they're offering it). As mentioned in the piece this wouldn't be a very manageable or predictable way to reduce headcount. It's much more likely the motives are exactly what the company said the motives are: they feel like they will be more effective working together. I would likely be one of the employees who said goodbye rather than move, and I don't think this is ultimately a good decision, but neither do I think it's necessary to dig for hidden motives and agendas.

organsnyder 10y ago
A month's severance is a lot cheaper than paying for unemployment benefits.
- jrs235 10y ago
  From my understanding, and this will vary from state to state since unemployment insurance is managed and dealt with by states, not the federal government, employees would still possibly be able to collect unemployment after that month of severance runs out if they are unable to get a new job (and are actively looking) and the unemployment claims will still ding IBM. That month of severance offsets their unemployment insurance rate increase(s). IBM is hoping folks can find a job in the next four months so they don't have to pay any out. Additionally, I would assume, part of accepting the severance might require the employee signing papers which state that the end of employment is voluntary and agreed upon possibly invalidating the employees claim to unemployment and thus hurting IBM's insurance rates. Whether that applies or works will depend on numerous factors, particularly the state the employment occurred in.
  - Consultant32452 10y ago
    The relevant statute is called the WARN Act, Worker Adjustment and Retraining Notification. This requires 60 days notice (or 60 days pay) among other things. https://www.doleta.gov/layoff/pdf/WorkerWARN2003.pdf https://www.doleta.gov/layoff/pdf/WorkerWARN2003.pdf
- andrei_says_ 10y ago
  Does a months severance pay eliminate the need to pay for 6+ months of unemployment?
  - markbnj 10y ago
    No, in my experience accepting a severance payment does not prevent you from claiming unemployment benefits, however the severance is treated as salary and you can't collect benefits until however many pay periods it represents have passed.

Pokepokalypse 10y ago

This is one way real-estate prices are being driven through the roof in big cities -> Where these company HQ's are located. Workers know. Workers who have worked at remote offices know that the best career-advancing projects happen at HQ where you can schmooze with the executive staff. They know that when the company hits a bad quarter, that the layoffs will disproportionately hit the remote office. They know that the best co-workers will be recruited, and offered little bonuses to relocate to HQ, and they're stuck working at the remote office. It just blows my mind that in the Internet Age: we're still stuck in this 1890's model of "must work at HQ". Even among the very leaders of the information age: IBM, Yahoo, Google, Facebook, and etc. The whole point of the Internet and networked computing was "It does not matter WHERE you are." Unfortunately, to the businespeople who run these corporations, it very much DOES matter. If you're not in their office, they don't control you. So we're all forced to move to these areas where the big corporations have invested in their corporate headquarters. It's the most secure way to work. And you end up paying either through commute-time, or outrageously inflated real-estate prices.