When Should Employees Take a Voluntary Buyout Offer?

Shaw Communications Inc. (TSX:SJR.B)(NYSE:SJR) has made headlines in recent weeks after offering a significant percentage of its employees a voluntary buyout, with a higher than expected percentage of said employees jumping on the offer.

With the one-time offer intended to make the company more competitive, nimble, and innovation-focused, the reality is that any time one-quarter of a company's workforce walks out the door, doing much of anything is likely to be affected, at least in the short-term.

From the employee perspective, there is much to consider in whether or not taking the offer makes much sense. For example, checking to see how attractive a buyout package is compared to an involuntary layoff is important to consider.

For employees working in companies that are Federally regulated, there are also rules with respect to the minimums employers are required to offer employees in a layoff situation. In an eggshell, as with any other negotiation, knowing what your "best alternative to a negotiated agreement" (BATNA) is before signing on the bottom line should be the primary course of action for anyone handed a voluntary buyout offer.

Buyout offers can also be tricky depending on the language of the offer and what stipulations are assigned to the deal. For example, employers can include non-compete clauses or other financial jargon which could invalidate future employment opportunities for the employees in question.

Knowing what the brass tacks of the deal is long-term is very important - for those concerned about what this will mean for their long-term career, seeking legal or financial planning advice is always a good idea.

Invest wisely, my friends.

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