Comment by vkou
17 hours ago
With these kinds of offers, they don't expect to get rid of 60,000. They expect to get rid of Y,000.
They make the offer to 60,000 (typically, an entire department gets this offer, including people they want to keep). Some X,000 will take the offer. If Y,000 > X,000, they they lay off the difference.
This is what I was wondering, if they have some internal math that says "15% will probably take this offer" targeting a lower number like 10k. And if they overshoot, it's not like they'll have trouble refilling positions in this economy...
You say that but the economy seems pretty strong to me, we have lower than average unemployment with above average job listings. It's harder if you're on visa otherwise it's pretty competitive
?s/economy/tech job market/g
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In general, and especially for the technical roles, they are probably going to have trouble finding relatively similar compensation.
You can tell what proportion they want to take the offer by how generous the offer is. And indeed:
> The Redmond, Washington-based company is expecting a lower proportion to accept the voluntary exit offer because the employees included in the offer are younger and no additional incentive is given beyond standard severance for their length of service, the person familiar said. Typical take-up levels for buyouts in tech are between 3 per cent and 5 per cent, they added.
https://www.ft.com/content/2ef29406-f2f8-413f-81f6-5ae098c97...
Including people they want to keep? What if all the people they wanted to keep accepted while those they didn't want to keep stayed? Certainly makes no sense.
I imagine they don't extend the offer to specific people they want to keep.
I'm still not sure what the advantage to the company of an offer like this is versus layoffs where management gets to choose who leaves, unless they feel the "loyalty test" of deciding to stay is worth more than their own evaluation of employee performance.
The advantage is this:
1. Some C-suite asshole wants headcount in your division reduced by, say, 5% next year. He has zero visibility into anyone's performance, or any of the projects anyone is actually working on.
2. His subordinate directors could do random, or targeted layoffs to hit that 5%, but this ruins morale for everyone who survives, and is rather awful for those that don't.
3. ...Or, they could make this offer, let people leave on their own, try to convince any stars who want to take it to stay, don't do any backfill. Then, hopefully, between the voluntary layoffs and no backfill, you might hit that 5% reduction, and not have to do involuntary layoffs. (Or if you do, they would be much smaller.)
4. This is less disruptive for teams and managers, because with voluntary layoffs, they have time to plan for these people leaving, instead of showing up to work on Thursday, and being told that 5 people on their team were given the pink slip this morning.
5. This is also, obviously, less disruptive for employees who take the offer (as they can control their exit, and get a payout), and less disruptive for anyone who doesn't take the offer (lower odds of showing up to work on Thursday, and getting a pink slip).
> What if all the people they wanted to keep accepted while those they didn't want to keep stayed
That's not an outcome they'd like, but it's an outcome they have to accept, in order to not piss off everyone else.
1. For anyone they want to keep who takes them up on the offer, they always have a chance to try to convince those people to not take the buyout offer.
2. If you make the buyout offer conditional to particular individuals, it will sow resentment and division.
It's generally better for the employees and the employer to do this kind of blanket buyout. If they voluntarily hit the reduction targets, nobody needs to be laid off. If they don't, the layoffs will be there, but smaller. If the 'wrong' people want the buyout, there's still a chance to convince them to stay. If they don't want to stay after the convincing, it's probably best for them to go on their way.