Microsoft offers buyout packages to some 60,000 employees, or more than 25% of the workforce. That’s a huge number by any standard, and it sent a signal and shockwave through the industry this week.
I’m the former vice president of human resources at Microsoft, and while I’ve been away from the company for a while and don’t have any inside information, having been inside Microsoft and in the industry for 50 years, here’s what Microsoft employees should consider – and what they may not realize when accepting a buyout offer.
Your buyout offer may or may not be the best deal you get
When making a buyout, position, seniority, level and other factors are taken into account for each tailor-made offer. The offer is likely to include remuneration, maintenance of benefits and possibly an acceleration or continuation of the acquisition of shares.
That said, Microsoft may not offer job buyouts more generous than severance packages, but companies generally offer better terms to people who leave voluntarily than to those who are laid off. This is not only to encourage employees to leave voluntarily, but also because the costs to the company are lower if these workers leave voluntarily. There is less legal risk, time and money. It’s also simply easier for the business to manage.
If you are offered a buyout, I generally find that this could be the best deal you will get. If this is not the case, you could settle for the same offer as someone who was laid off and not collect unemployment.
A buyout can impose very difficult career choices
If you receive a buyout offer, the next step should be to review your budget. Does the offer give you enough money to retire? Enough to support a prolonged job search? Buyout can be a good way to force some very difficult career choices.
Spend time reviewing your cash flow and pay close attention to employee benefits. For many, healthcare costs represent a significant portion of their budget. Balancing the buyout offer and maintaining coverage often constitutes a turning point in the decision.
Also consider the vesting dates of any shares you may have. Compare when you could acquire with and without the offer, as these dates may mean a significant change in your investments. The decision whether or not to take the buyout depends heavily on the offer and your situation. If you have retirement in mind, this offer might just be the trigger you need to move on. Perhaps the best deal you’ll ever see.
However, if you need to continue working, there are many other things to consider.
Purchasing a buyout can give you a leg up in a tough job market
The job market in the tech industry has been tough for about a year and is showing every sign of deterioration. If the buyout does not give you the opportunity to retire, you should plan for an extended job search period, perhaps six months or more. It’s hard there. Be prepared.
One thing to consider if you need to continue working is that the buyout could give you a short head start in the job market. Assuming Microsoft and others make more layoffs like they did last time, the tech job market will be flooded with quality people. Of course, you can look for a job while you have one, but the buyout gives you time to look for full-time employment.
Either way, if a job search is in your future, don’t delay. This market shows no signs of improvement.
Finally, if you are offered a buyout, do not ignore it. It’s a sign. I would read it as a clear signal from the company about your value, at least from their perspective. You can bet on the odds, but if subsequent layoffs happen, I’d bet that those who declined the buyout are somewhere on that list.
Repurchase or not, some things to do
This buyout is the latest signal of a vast realignment of the labor market, at least in the technology sector. Even if this isn’t an option for you or you don’t think you’re at risk of future layoffs, it would be wise to keep all your options open.
Update your CV. Spend time perfecting it, focusing on the clearest skill set possible. When a market contracts, the safest bet is to have a particular in-demand skill. When times are tight, the GP is often the first to let go.
Work with and grow your network. Grab coffee or chat on Zoom with everyone you know. Peers from other companies, even other industries, are invaluable when the going gets tough. Especially when the world is changing and it is so difficult to predict the next hot spot, having so many warm relationships across sectors is a huge asset.
Don’t go looking for work, but keep those connections alive. You never know when someone’s manager will say, “We need someone like that.” And your friend may say, “I just know the person.”
Whether you’re offered a buyout or decide whether or not to accept it, having a network of people to connect with is your greatest career asset.
What to do if you receive a buyout offer
Budget first, and awareness second.
Decide carefully about your short- and long-term financial future and make a decision based on concrete facts. Then connect with people you know across all industries, all over the world. These relationships will serve as excellent sounding boards and may well pave the way for your next role or the friends you need in retirement.
When contacted for this story, a Microsoft spokesperson pointed to Business Insider’s statement on the Official Microsoft Blogwhich read in part: “Today we are introducing a new Voluntary exit offer (VEO) to eligible employees within participating organizations. » They added that “VEO is similar to a standard severance offer, which varies by market. The offering includes payment based on service performed and base salary, as well as career transition services, which include career coaching and job search assistance.
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