Negotiating Your Layoff - It Can Be Done!

Facing a lay off?  Don’t just accept the severance package they show you.  Maybe you can negotiate for some improvements.  It’s worth a shot. I was browsing through the www.OurExperienceCounts.com web site and read the "Ask Cher" answer to Robert in Ohio who has an impending layoff.  This question and Cher's answer got me thinking about the times I was laid off and the times I had to lay off others along with some things I've learned you may not be aware of.  One of which is that you can negotiate.  What follows is not from any corporate policy or legal analysis.  It is based on my personal experience and will obviously vary by company and situation.  Some companies are quite rigid in these matters and others have more flexibility.  You need to be the ultimate judge of the situation you find yourself in and decide how you want to handle it.

We all know (or should know) negotiations are part of the process of acquiring a new job.  I could devote an entire book to the subject of negotiations related to being hired by a company, and many people have.  What many people don't realize is you can also negotiate at the other end of your stay with a company as lay offs are being handed out.

When should you think about resigning rather than waiting for the layoff?

There are two times when you should think about negotiating the terms of a lay off.  Once is after everyone in the company is aware that a layoff is coming but before it is announced (or the individuals selected).  The other is when you are informed your name is on the layoff list which is usually when you are called into a small room with an HR person and your manager. If you are aware of an impending downsizing, and you're pretty sure your name will be on the layoff list, you have an opportunity to beat them to it.  This is an advantage to them since it lowers the number of people who will be impacted by an involuntary termination.  It's good for you because they probably haven't locked in the layoff severance package details yet and you may be able to negotiate a better deal than if you wait for the axe to fall.  To do this you can ask them if they are looking for volunteers.  If so, then the field is open to negotiate a suitable severance package.  In the negotiation you can even ask them to put in writing if the layoff package winds up having better benefits than they give you, they will make up the difference for you when the layoffs are announced. This preemptive strategy is well known so I don't want to devote too much space to it.  What I really want to talk about is in the following paragraphs.

Are you in a position to negotiate when your name is on the lay off list?

Let's look at the point in time when you become aware you are on the layoff list.  Most people believe they must just sit back and accept whatever the company puts on the table (and in my opinion the company designs the process to convey that feeling).  However, it isn't necessarily the case.  In these situations you are not in as powerful a negotiating position as during the hiring process but it's also not zero. In order to negotiate in a layoff situation you must be properly situated.  You must have been a good employee, with good performance reviews, be generally liked by people you've interacted with on the job, and be cooperative with (rather than fighting) the lay off.  If you qualify in this regard you are in a position to negotiate.

Why would a company be willing to negotiate with you during a lay off?

There are several reasons.  One is that it is more comfortable for them if you leave easy.  If they have to give a bit to avoid discomfort they may do so.  Second, they don't want you "bad mouthing" the company after you go.  And third, you know a lot about the company and how it operates.  If they can make it less likely you will use information in a negative way, that is worth something. In most cases they will offer you some sort of added severance benefit if you sign an "I promise not to....." letter.  Usually this is a legal document where you promise not to sue them for discrimination (e.g. age or gender discrimination).  It varies from state to state, but usually you have something like 30 days after your layoff notice to sign the form and receive the benefit.  DO NOT SIGN THE FORM IMMEDIATELY - take it home and think about it.  Maybe even talk to a lawyer - many lawyers will give you a free 30 minute consultation.  Your company will also point out to you that you signed an NDA (Non Disclosure Agreement) when you were hired which extends past the end of your employment.  So, they're covered, right?  Well technically and legally yes, but do they want to sue you in court after the damage is done?  Could they even prove it was you who divulged something forbidden?  How much will they need to pay their lawyers to prove it all?  Will you be cooperative if they need you for some other purpose such as testifying in court about some corporate lawsuit they're defending or litigating, Etc.  They would much prefer not having to worry about any of that.

What can you negotiate as you are being laid off?

First of all, don't even try negotiating a reversal of your layoff - it's probably not going to happen. But, you can talk about many other conditions of your layoff.   Here are some ideas:

• On one of my layoff's I was able to get the company to pay for extra months of COBRA benefits which was not in the initial severance package.  Here's a note: when you are laid off your insurance automatically extends to the end of the month of your last day on payroll.  If you are laid off on June 1, you get 30 days of continued health insurance.  If you got laid off the prior day (May 31) you get 0 days.  I was laid off on the last day of a month and used this info to negotiate them paying for COBRA for an additional month.
• How about asking them if you can keep your laptop?  If it's over 3 years old it probably has no book value and is most likely not going to be given to the next person so they may let you walk off with it.
• You can ask them for a letter stating you were laid off for economic reasons, or your department was eliminated and they would hire you back if a similar position became available again.  The key wording here is something indicating that you were not the "dead wood" they cleaned out.
• Maybe, rather than them giving you your unused vacation in a cash payment, ask if they can keep you on payroll and on vacation for those number of days instead.  This let's you say "still employed" for a bit longer in relation to your job hunting efforts.  It also keeps your benefits alive a bit longer - including 401k matching and stock option vesting.
• If you're getting a lump sum severance payout and it's near the end of the year, ask that the payment be made after Jan 1 which may put it in a tax year where your income (and thus tax rate) is lower.
• If they are offering outplacement services, see if you can have the amount of time the service is available to you increased.
• I saw one case where there were two people doing the same job and one had to go.  The one let go got the company to agree if the person they kept left the company within 3 months and if they were going to re-fill the position they would offer the laid off person first choice to take the position and at her prior compensation levels without opening the job posting to others.

 

I'm sure there are other things you can think about.  The important thing is that you leave on a positive note and they feel by giving you a little extra, they have gained some benefit.  Don't threaten.  Don't imply you'll do something to hurt them unless they cough up more.  Rather, suggest it would make your transition much easier if they could see their way to giving you (fill in the blank). Try it.  What have you got to lose at that point?

Categories: Layoff, Negotiation, Job Search Help, Strategies for Unemployed, Things You Need to Know