One out of eight headquarters employees took the buyout; it's unclear whether that's enough to avoid layoffs. -- By JACKIE CROSBY, Star Tribune
Whether that figure will be enough to prevent forced layoffs remains to be seen, as the company continues to analyze its revenue and expenses, spokeswoman Susan Busch said.
An exact number of buyouts won't be known until Jan. 16, the deadline to back out of the plan, but the losses represent a 12.5 percent reduction in the workforce at the corporate offices.
The buyouts come in the midst of the worst retail climate in decades, as beaten-down stock markets, unemployment fears and a lingering housing slump have dried up consumer spending.
The nation's largest U.S. chains on Thursday confirmed dire predictions of a dismal holiday shopping season, reporting that sales dropped 1.7 percent in December compared with a year ago, according to the International Council of Shopping Centers. And as part of a wave of store closings that could reach an estimated 73,000 locations in the next six months, Macy's decided to close its store in Brookdale Mall, one of 11 that it will shutter nationwide because of slumping sales.
"There's just no incentive to spend out there," said retail analyst Ken Perkins, president of Retail Metrics. "People are strictly buying what they need, and they're forgoing virtually all other purchases."
That's the start, you can read the entire online article for full reporting; this is the end of the itme:
Workers from across the company signed up for the buyouts, including hourly workers and managers, Busch said. Most will leave the company Feb. 12.
Among those taking the buyout was Julie Gilbert, a senior vice president who launched an initiative to make Best Buy stores more female-friendly and to recruit, retain and promote women within the company.
Gilbert said Thursday that she will form a consulting business to take the WOLF program (Women's Leadership Forum) to companies worldwide. She said she already has interest from businesses in London and in Amsterdam, the Netherlands.
"It's time to live out my destiny," she said.
In 2004, Best Buy outsourced about 650 workers in its IT department and 115 others in human resources to Accenture. As part of the move, it eliminated about 160 positions, Busch said.
Severance packages are offered so that workers taking them are inelegible for Unemployment Insurance benefits, thereby keeping a firm's UI rates fixed instead of escalating.
Usually, (although I have no knowledge of details in this instance), but usually the severance package amount is less than a full term of benefits that would be drawn by a worker becoming laid off and unable to find new employment quickly. If you are aged, very young and inexperienced, or in some way you see yourself in an unemployment situation where the probability of a quick landing on your feet is low, then weigh all that, find out what your benefit rate would be, and compare that with the severance terms, and make your gamble.
Where the severance is helpful is as in the case of Julie Gilbert in the reporting, wanting to form a business and even in trying times wanting to take that gamble. There a fixed severance is the best option as with retiring from the labor force to want to have more leisure - in either instance you would have to run a fraud on the UI bureaucracy [something fairly easy to do, given quality of personnel there] or you would not remain eligible to keep receiving benefits if not actively seeking suitable employment. Some get away with such frauds, many business owners see it as a reality that fighting an adverse UI determination is like pushing a big heavy rock up a big, big steep hill, costing money at each appeal stage, with remands for the bureaucrats to figure a new way to screw up things against one they've once disadvantaged, for continuity of policy or just to be jerks, and if you win one thing in an appeal without winning the whole enchilada, good luck, it's fighting city hall, at the state bureau level, and success rates are low.
So, the severance payment end run of escalating tax rates is there, and firms use it.
For some it's right. For others it is wrong.
But defrauding the UI process to get benefits you really are not entitled to is hurting the person or firm that fed your family in whole or in part and causing its cost of doing business to improperly rise. As such, it is scum to do that, and you are scum if you do it.
If you are truly unemployed through no fault of your own, and actively seeking suitable employment, then you are exactly the kind of person the system was set up to protect, and you are entitled to any benefits you receive between jobs.
But if you're some kind of "princess" living in a half-million dollar plus home in a golfing-club development with no intention of honestly looking to be employed after some cushy employment system with flextime and almost no commute ends and you posture youself as if honestly seeking new work but without any such honest intent, then you have, in effect retired from the work force, and are a cheat -- you are cheating the system and dishonoring all the honestly unemployed people forced to the hard task of looking for work when out of work and when wanting to work.
This fact set is given as a hypothetical example, not that I know of any actual or pending situation with that fact pattern.
But there are such scurvy people out there, do not doubt that.