Anyone hear any rumors regarding US voluntary separation, possibly with incentives? It happened in the 80’s and late 90’s....maybe it will happen again?
17 replies (most recent on top)
From the old fart's perspective, it's because we built this place you liked so much that you chose to come work in ... The 'social contract' within XOM was, until now at least, weighted towards the end, to keep 'old farts' from going to monetize their technical knowledge elsewhere - with generous 401k and pension. Don't tell me this didn't play a part in choosing to come work here cause I won't believe you. If you feel sh___y at mid-career, imagine how we must feel after 30 years of this mistreatment. But you still have options - exercise them, leave O&G industry, there is no future here.
Why do we have to cater to the old farts who are basically retired in place, just holding on in case there is more incentive (more tit to squeeze)?
Why would such a package provide any incentive to mid career people who have potentially a steep salary curve ahead of them? Sh–ty consolation prize, to inherit the mess from those who smothered the golden goose.
In the US, XOM already has a standard Separation package that is approved by Management that is could use and has been used in divestment situations. It does not add years to retirement and does not add to age. It is simply weeks of pay based on service,capped at 78 weeks. In the US since 1986, XOM stopped adding to age and service to incent voluntary retirement. XOM lost many people it preferred not to lose with a general package and its approach since 1986 was to target low relative ranking. If XOM does something it will be in the marginal assets that they plan to divest, like Australia. In the US, it is better to cut low performers, with no severance
Or they just make cuts with no packages. WARN act requires 60 day notice of layoffs. Coincidentally PIP’s end 31 Oct in the US.
It would be a PR disaster but if the dividend is the only thing that matters I don’t think they care.
https://www.cnbc.com/2020/06/09/what-to-know-if-your-furlough-becomes-a-permanent-layoff.html
Headcount reductions will never be enough to support the dividend. Exxonmobil cannot make the math add up.
On the contrary. Giving packages right now will prove the point that the MLRPs were not layoffs. Since they need HC reductions, and they have exhausted the NSI pool, packages is the way to go.
Likely they will be heavy on Pension incentives since these can be managed and not appear as n the opex IMMEDIATELY.
Australia is not necessarily the model. Each country has its own pension rules.
So, there will be targeted reductions In the US - TMTS and HW3 likely have already names filled - but these will not be - again likely - enough. Packages is then the next tier.
re: 2-2-2 etc, previous answer was close enough:
- first number is add to YEE, so that a 53 yr old becomes 55 so retirement eligible, a 55 yr old becomes 57 so larger payout etc
- second number is add to age, so that improves some age related discounts for example on lump sum, 5% discount for every year below 60
- third number is weeks paid per year of service. Typically capped at 52 weeks.
Note that this is the type of programs offered by our IOC competitors
All of these are targeted to (near) retirement eligible, whose salaries are presumably higher, but may also be useful for younger people sitting on the fence.
Also because most of the payout comes out of the pension fund, the company has the discretion of replenishing it over the next few years, rather than immediately - it still is pretty well funded so it can take a little punch
I am sure someone somewhere is running those scenarios, whether they will come to be, one can always dream!
If packages are offered now - benevolent jackals will turn the prior PIP event into 4 years worth of dividends for the company as a legal class-action settlement.
In other words, with what they've already done in the US - lawyers/regulators will send the company into the woods.
Ahh-woo. Werewolves of Dallas.
Thank you
To answer the 2-2-2 question.
I believe they mean...
2 years pay or 2 weeks pay for each year served with possible cap.
2 years added to age (known as an age bridge to make a 53 yr old 55 or 57.5 a 59.5)
2 years added to service. (This would be a service time bridge).
No packages.
The last thing they will do is invest in people - they are cheap like that.
What do 3-2-2 and 2-2-2 mean? Thanks.
EM floated trial balloon package in Australia where they can gauge uptake during COVID (capped at 1 year without pension adjustment). MLRP doesn't get to needed cuts fast enough. Have to believe all options on the table now for lowest cost move to achieve needed headcount reduction (including SPOSA). At merger, 2-2-2 was sufficient. It's hard to gauge what is required to today to achieve targets, especially given variability around COVID, and available EM cash to fund SPOSA.
Early on I would bet against US packages, now I am hearing rumors (downstream). The longer this lasts and the harder they stick to the dividend, the more they will need to cut and there is no way they can reach 30% kind of targets with MLRP quickly. They have said they are studying staff cuts, and our IOC competitors are giving packages, it would not make sense for them not to have it-would be a huge red flag that they cannot even afford that. They were offered in the 80s. 3-3-2 I think, and 2-2-2 capped at merger time. That should help the retirement eligible and the near retirement eligible (highest salaries) head for the exits, with most of the additional cost borne by the pension plan. But it could also be wishful thinking ... rumor mills run overtime at times like this.
Even in the 00's after the merger there were packages. When things got bad in '09 as well. And when not enough people take the package, there were SPOSA's (separations). However, given the current economic environment, the management douchebags are going to do everything to avoid paying out more money.
Yes.
From what I’ve heard....unlikely for the US....apparently there were lots of “regretted” departures back then. That said, can we trust anything being said?