What is a voluntary separation, and how does it differ from a traditional layoff?

The layoffs tearing through the tech industry have been brutal. Upwards of 144,554 employees have been let go by 917 tech companies this year, according to Layoffs.fyi, and the giants haven’t been spared. Both Meta and Amazon have laid off thousands of workers as the the economic downturn necessitated downsizing after pandemic-era hiring sprees.

At Amazon, some employees received an email offering a voluntary severance package. The offer, CNBC reported, included a “lump-sum” payment equal to three months’ pay, plus an additional week of salary for every six months of employment and a 12-week healthcare stipend. Employees had until November 29 to decide whether they’d take the deal or risk being let go as part of a future culling.

Unlike some of the more ruthless ways companies have enacted reductions (looking at you, Better.com), voluntary severance, or voluntary resignation, is a different prospect for both employees and HR, as it can stave off bigger cuts down the line, Kate Bischoff, an employment attorney based in Minneapolis, told HR Brew.

What is voluntary severance? It is essentially making a deal with your employer to resign, knowing that if enough employees don’t agree, bigger, more painful layoffs might occur, Bischoff said.

She explained how a company might reason, “We have to do a reduction of some form. We’re going to let folks who aren’t happy decide if they want to leave on their own.” But if an insufficient number of employees accept the voluntary terms, HR will have to go back to the drawing board. “That feels harder to do, because now they’re looking at performance, they’re looking at potential redundancies,” Bischoff said.

A regular occurrence? Though the voluntary resignations at Amazon may have come as a surprise to its employees, who’ve enjoyed the job security that comes with working at a growing company in recent years, they’re not uncommon, Bischoff noted: “3M in Minnesota, one of the largest companies in the world, they do voluntary resignations regularly before they have to do the forced layoffs.”

Bischoff explained how companies that regularly issue voluntary separation offers may make decisions based on whether employees might consider leaving their position as part of a career switch or are nearing retirement age. (The Age Discrimination in Employment Act, which protects employees over the age of 40 from age discrimination in the workplace, does not preclude employers from offering voluntary resignation packages to those nearing retirement age.)

But issuing such offers regularly comes at a cost, Bischoff said: “Employees who are at those companies get conditioned to this ask every year, and some people expect that [it] will happen and plan accordingly,” making weighty personal and financial decisions in accordance with severance packages.

Whether voluntary or not, layoffs may also run the risk of putting workers on edge or running them “ragged to the bone,” she added.

There are various ways HR teams can make layoffs sting less, sources have told HR Brew. Alumni groups and outplacement services have been particularly in vogue of late.—SB

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