Widespread Early Retirement
Before resorting to layoffs a company may try a number of cost-cutting measures. If the company has a large number of employees who have significant tenure and are near retirement age, the company may try to entice them to retire early. The logic of this approach is based on the fact that these people have the highest salaries. The company can actually save money by enticing them to retire if it means that those high salaries are off the payroll.
Many large companies have tried this approach and then later had to resort to layoffs. Digital Equipment Corp. and AT&T once operated under a ''no layoff" policy. After offering voluntary layoffs and early retirements, both eventually had to employ general layoffs to reduce head count.
Phew, I Survived
One major note: Just because you survived a layoff with your job intact, don't assume you are safe. One of the key early warning signs of an impending layoff may be a layoff itself. Often when one layoff fails to produce needed cost savings, a second or third will follow. Sensible companies choose to lay off as many people as necessary quickly, to allow the remaining people to get on with the business of rebuilding what s left of the company. The "do it quickly and get it over with" philosophy doesn't always prevail, however. Some companies will try to lose a few employees at a time in the hopes of keeping all they can possibly afford to keep. Once a company starts laying off employees, you should generally assume you are not safe until significant evidence to the contrary presents itself.
"Luckily," Frank said, "the company got a little smarter after the first couple of layoffs they went through. In the earlier years, they knew they had to keep good talent to get the company off the ground. So they'd try to let just one or two people go. The result was that one or two weeks later they'd have to cut someone else. I felt relieved after the first two people were laid off that first time. After that, I learned never to trust them until the sales numbers started moving up again."
Other Details
After being laid off, most people think of at least a handful of things they wish they had done immediately before their layoff. For one reason or another, you may find it impossible to complete some of these important tasks once you have been asked to leave. If you're concerned about your current situation, do several things now:
- Make sure you have your network in place. As any good employment counselor will tell you, most new jobs are found through the network of contacts you build over time. Before you are asked to leave, make sure you have copies of all the important addresses and telephone numbers you will need. Take your business card file or telephone card file home and copy down every name, address, and telephone number.
- Your company may choose to keep these items after you have left, leaving you without critical information with which to begin your new search.
- Take a close look at your financial picture. If you don't think you can survive for 9 to 12 months on your current savings, you might want to consider a home equity loan or other type of low-interest loan.
- It will be much easier to receive approval for such a loan while you still have a job than it will be if you are laid off.
- Find out how many vacation and personal days you have left. In the event you are laid off, most companies will pay you for vacation days you have earned but not used. The same may not be true for personal days or floating holidays, however. Talk to a human resources representative to determine what days you have available. In general, you should not use any available vacation days, because the pay you receive for them will be helpful if you are laid off. Personal days or floating holidays for which you may not receive pay should be used judiciously. You may already be interviewing or you may choose to take a day to research potential job leads.
- Use any other benefits you are eligible for. If you haven't had a checkup in a while, schedule one right away, and go to the dentist. If you need a physical or other medical exam, do it now. You may lose your medical and dental benefits immediately after you leave or after your severance agreement ends. With the staggering cost of medical care in recent years, you are better off to let your current insurance provider pay while you still have the option.
- Remove all personal files. After you are laid off, there may be a question as to what belongs to you and what belongs to the company. In fact, you may not even have access to your office in the event you are laid off. To be on the safe side, remove personal files such as insurance or benefits records. Do not, however, take anything that belongs to the company or is of a proprietary nature.
Being prepared for a possible layoff will help you develop career resilience and build survival plans for the future.