My company is offering a voluntary severance option to about half of employees. It would include 35 weeks of pay and benefits and some job search support. I’m not sure I want to take it, but if I do, would it look bad to future employers? Will my job search be harder because of it?
I guess I’m not shocked to be hearing about voluntary severance packages again. But brace yourselves, the last time we heard a lot about these was...in 2008 at the height of the downturn. I say I’m not surprised because it does seem like a natural next step for many companies. If you’ve never heard of this, sometimes when they need to cut costs companies will offer a certain percentage of employees the opportunity to volunteer to leave. The thinking is that instead of being forced to select the unlucky ones some employees will choose to go. Maybe someone is moving soon, thinking about staying home with kids, wanting a job change anyway, or just willing to take the gamble.
The two biggest things to keep in mind when your company is offering a voluntary severance: if they’re offering, there WILL be cuts, and the first offer is almost always the best offer.
If the company has gotten to the point where they’re even discussing this, you can feel pretty certain some percentage of the workforce will be let go. It’s just not a step companies take if they don’t need to downsize. But past that, every role and every company is different. You might have a really good idea of where you fall in the pecking order, and how hard it would be for your company to function without you, so you might be able to make a pretty educated guess as to where your job would land. Looking at AirBnB’s recent layoffs, the employees they let go were mostly in departments that weren’t part of the company’s immediate plans to rebuild post Covid. As much as you can possibly tell, what will your company be focused on in the next year? How integral is your team and your role to those plans? It’s not a perfect method, but it can help you start to think critically and objectively about your chances in a layoff situation.
And now the second part of this. The hope is that by getting a smaller number of employees to take the first offer, they won’t be forced to make larger and deeper cuts down the line. If they have to make those bigger cuts the package is never quite so generous, because the money has to be spread amongst more people. So, if you think your department or position is at particular risk, taking the first voluntary offer could be a smart move.
It’s awful, for sure. If you take the voluntary package there is always a chance you weren’t high on the list to cut and your job would have been safe. If you don’t take the voluntary package there is always a risk you’ll be let go later with fewer benefits to go around.
Circling back to the original question, in my professional opinion, taking the voluntary package doesn’t reflect negatively on you in your job search. When asked about this in interviews you’ll simply say: “My company offered certain divisions of the company a voluntary severance package during the Covid shutdown. As best I understood, my team wasn’t part of the immediate growth plan, and my position would probably have been eliminated, so I opted to give myself more time to find the right next role. It was a really tough decision and I loved the work I was doing, but I appreciate that they tried to be fair in the process and gave me a chance to do that.”
I suspect we’re at the beginning of a long string of corporate layoffs, so over the next few years lots of candidates will have been laid off, furloughed, or offered voluntary severance. This answer is great because you’re showing that you opted to be intentional about your job search, while also speaking positively about your last company and role. As long as you handle it that way, I don’t see how any future employer could see you taking a severance package as a red flag.