NewsWith tech companies continuing to adjust to rising costs and unprecedented investment in artificial intelligence, the impact on their workforce remains significant. More than 90,000 tech employees have been laid off this year alone, prompting major players like Meta and Microsoft to explore new strategies to streamline operations while staying competitive in the AI race.
Farrell Fritz Labor and Employment partner Domenique Camacho Moran recently shared her insights with Fortune on one of the most notable shifts: the growing use of voluntary separation programs, or “buyouts,” as an alternative to traditional layoffs.
From the article:
In the past, Microsoft hasn’t been shy about laying off employees and cut 15,000 jobs last year. But management is jumping on an increasingly common trend of offering voluntary separation instead of laying people off, said Domenique Camacho Moran, a lawyer and partner at employment law firm Farrell Fritz. Her firm represents Fortune 500 companies, large universities, and several middle market businesses.
A buyout is a way to support good and loyal workers and avoid the devastating blow of being laid off while ultimately cutting jobs. By contrast, layoffs can be more complicated, requiring an evaluation of each employee’s skill set and performance to avoid litigation risk, Moran said.
“The voluntary exit option gives the employer the ability to say, ‘it’s not about the fact that we don’t think you’re doing a good job, but if you’re thinking about it’s time for me to move on. I’m going to incentivize you to do that because we need to cut some staff,’” she said.
The growing popularity of buyout speaks to businesses deciding they need fewer employees because of AI and financial pressures, according to Moran.
Read the full article on Fortune here: Here’s why companies like Microsoft are offering voluntary buyouts instead of laying off workers | Fortune