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Question
In November 2001, during a recession and after having eliminated 6,100 jobs in 2001, Merrill Lynch undertook a new wave of layoffs involving thousands of workers. But in the month preceding those new layoffs, Merrill Lynch offered its employees the opportunity to voluntarily resign in exchange for a severance package that included a lump sum of cash based on the employee's years of service.
The interesting twist on this offer was that the volunteers who stepped forward to accept the package might not actually get it. Each volunteer's manager would decide on a case-by-case basis whether the volunteer could receive the package. When the offer was announced, all employees were told that the severance package would be exactly the same for those employees who were ultimately dismissed in November as for those who volunteered to take the buyout deal in October. The deal marked the first time that Merrill Lynch had ever had a formal voluntary buyout program.
Required:
A. Briefly discuss TWO (2) advantages and ONE (1) disadvantage of the severance package Mr. Lynch is offering to his employees.
B. Based on the concept of grounds for dismissal, what are your views on the employees that were dismissed in November?
C. Recommend THREE (3) factors which should be considered to ensure that the next voluntary buyout program is a success for employees.
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