We’ve had a fair bit of feedback over the past few weeks about our stance on “voluntary severance.” Typically, in response to treating Hogan & Hartson’s offer to buy out 149 staff as layoffs.
Here’s what we’ve said previously on the subject:
We treat buyouts and “voluntary redundancy” as layoffs for purposes of the tracker. They’re both cost-cutting measures that are only being implemented as a result of current economic conditions. The layoff tracker is a commentary on firms’ financial activities and vitality; offering buyouts has the same economic effect as layoffs do, albeit with a lesser amount of angst. People who were willing to leave firms in good times certainly didn’t have the ability to also collect an additional 3 months’ pay on the way out. Either way you look at it, these firms are paying for attrition.
Tracking layoffs is more of an art than a science right now. We have to sift through stealth layoffs (which you should also read for our position on the absurdity of that tactic), “redundancy consultations,” and pure rumor and speculation.
Our opinion is that voluntary-severance offers and redundancy consultations are effectively the same thing from the perspective of the firms’ economic health. It is a simple statement of just how overstaffed the firm perceives itself to be. Eventually, that number is going to have to be met. Anyone who would accept such an offer in this economy is an idiot or somehow already has a backup plan. Those who decline the offer are just prolonging the inevitable – in a perfectly rational manner; think of it is as extending the severance payout.
When actual acceptances are announced, we’ll revise downward (or upward) as appropriate. More likely, we’ll be reducing, in Hogan’s case, the 149 to some lower number in the context of a piece about “normal” layoffs in an amount that, when added to the volunteers, exceeds 149. In the meanwhile, we know Hogan has to get rid of 149 so we count it.
I’ve been writing up this draft for almost a week in response to an emailer’s complaint that we are being “journalistic[ally] disingenuous” to equate the offers with actual termination. As we’ve said all along, it’s just a matter of timing and manners, and this week we have our proof that it doesn’t take much for “voluntary” to become “mandatory”: Troutman Sanders, which has offered staff a voluntary buyout that is “likely to be followed by a layoff.” That sums up our stance in a nutshell: it’s nice that the firms allow those who are interested to “take one for the team,” but at the end of the day, the affected firms acknowledge that cuts have to, and certainly will, be made.
The methodology has been updated for those who care to review how and what we count.
By the way, it’s pure coincidence that we’ve been picking on Hogan so much lately.
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