Following Rogers’ offer of voluntary packages to 10,000 employees, three experts look at the advantages and risks of the strategy
Rogers Communications' recent offer of voluntary buyouts to roughly 10,000 employees — nearly half of its workforce — has put a spotlight on the practice as a workforce strategy. The telecommunications giant is pursuing departures rather than terminations, a choice that carries both considerable advantages and meaningful risks compared to traditional mass layoffs, according to experts.
Employment lawyer Lior Samfiru of Samfiru Tumarkin LLP identifies a couple of fundamental reasons companies pursue voluntary buyouts.
“The first is to save money, and the reason for that is with a termination, the law dictates what you have to pay employees, and that amount can be very significant,” says Samfiru. “A lot of these employers like Rogers have long-service employees for whom severance can add up quickly, and with a buyout or a voluntary package there's no requirement to pay anything — it's really what you and the employee agree to.”
Beyond financial savings, a second crucial advantage emerges: morale within the organization, says Samfiru. “When you let go of a lot of people, it certainly can affect morale and people's view of the company, and they start looking over their shoulders,” he says. “It's just bad for workplace morale, where in a voluntary situation it doesn't have the same significant effect on the employees.”
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