Buyout Offers and the Situation of Companies in the U.S.

Believe it or not, thousands of people want to lose their job. The US is in the middle of the worst job market since the Great Depression. In exchange for leaving their companies, more than 10,000 people have already accepted buyout offers. Moreover, this it’s happening even though unemployment is at the highest level in their lifetimes. More employers are putting similar offers on the table or even expanding offers they already made. That is likely only the start of what could be a buyout summer for the United States Economy.

Andrew Challenger is vice president of outplacement firm Challenger, Gray, and Christmas. He said that there is so much uncertainty. Thus, they see a lot more buyouts right now. If you are looking at reducing headcounts, then voluntary programs could be an excellent first step. It might save the positions of some people who would like to have a future within the company. Moreover, it offers choices for those who are considering making a life change. It can be a valuable program for both employees and employers.

Moreover, he and other experts said that voluntary buyouts might also help with employee morale during this difficult time.

Challenger said that companies do not like to let people go. In the case that people want to leave voluntarily on good terms, the company may be able to bring them back more comfortably if business conditions improve.

Buyout Offers

Moreover, these buyouts can also help to reduce labor costs. It can encourage more senior, generally more highly paid employees to leave. Thus, it will reduce the average costs of labor. Many offers for buyouts are based upon a formula that factors in time spent at the company. Thus, the program’s voluntary nature can reduce the threat of lawsuits for involuntary dismissals.

All the main airlines announced plans for buyouts. This would be intended to cut costs in the face of the travel plunge. Yet, the only one who announced their results was AAL (American Airlines). It said that 4,500 flight attendants and pilots had taken an offer a month ago. More early retirements and buyouts are coming to American Airlines soon.

There will be early retirements and voluntary departures at other carriers, which can eliminate or reduce the need for involuntary cuts of job. LUV (Southwest) was founded in 1967. Since then, it has never had a furlough or involuntary layoff. It describes its offer as the most generous packages ever offered in the history of Southwest.

Moreover, aircraft maker BA (Boeing) announced that 5,520 people recently took a voluntary layoff offer. Nevertheless, since then, nearly 7,000 other employees have endured involuntary layoffs. Boeing is looking to commit to additional layoffs later in the year for a target of 16,000 job cuts.

It is not only the battered aviation industry that has announced plans for buyouts. Lee Health is a hospital system, and Tech company Kickstarted is based in Florida. According to Challenger, they both announced buyout programs. Neither company responded to a request for comment. Financial firm TIAA confirmed its offer of lucrative packages, which could pay employees up to 91 weeks of base pay.