Your Company Offers a Buyout. Should You Bite?

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Rick here. I just learned that at least two friends and former colleagues were laid off by Meta in the past week, among 1,400 workers let go this month here in the Seattle area and 8,000 globally. The company is shedding 10% of its workforce as it tries to refashion itself for the AI era.

Layoffs are no fun. I’ve been through it twice, most recently in 2014, when I was one of about 200 people in one Microsoft conference room who were given the heave-ho en masse, one small corner of a purge that slashed 18,000 jobs in the company’s biggest layoff ever.

Microsoft is again in a belt-tightening mood, but it’s taking a different approach this time. It has offered voluntary buyouts to about 7% of full-time employees — essentially, anyone below the senior director level whose age and years of service add up to 70 or more. The terms look generous on paper, but the decision is not cut-and-dried, especially in a stagnant job market and an uncertain economy.

What would you do if offered a buyout? Personal finance writer Kate Ashford walks through some of the considerations below.

How to decide if you should take a voluntary buyout

- Kate Ashford, personal finance writer

Imagine if your company offered you six months’ worth of salary if you quit your job right now. Would you go? What if they threw in extra stock vesting and health insurance for a year?

It’s a question that workers are facing at various companies. Microsoft and NPR are two of the latest big firms to announce buyout offers, but it can happen anywhere — just ask state workers in North Dakota or employees of the Salt Lake City Public Library system.

There is no easy answer to whether you should take a buyout and run. But here are some things to consider:

Start with the math: As tempting as that buyout package may sound, understand that it’s not all hitting your bank account. You’ll still have to pay taxes on income — and if it’s a large lump sum, it could push you into a higher tax bracket.

Consider your career prospects: Are you closer to the beginning or the end of your working years? Are you near enough to retirement to bridge the gap? If not, how long will it take you to find a new spot in your industry? If you don’t take the buyout, could a layoff be imminent?

Negotiate if you can: Beyond salary (which is the obvious ask), is there a bonus that can be accelerated for you? Can you ask for a positive letter of recommendation?

Read all the experts’ advice on buyouts here.