Downsizing: How managers avoid the most expensive mistakes when it comes to severance pay
Waiver, bonus, company car: every detail counts in negotiations – managers can easily give away a five- or six-figure sum. A checklist and sample calculations show what matters.
In Germany, numerous companies are currently downsizing their workforce. The German industry alone has laid off over 120,000 positions last year. To encourage employees to resign, companies are offering substantial severance packages, sometimes reaching astronomical amounts. For instance, BMW aims to shed 8,000 employees quickly and offers a high-performance bonus to achieve this goal. Insider reports from industry circles reveal cases where BMW agreed to payments exceeding €650,000.
Mercedes is currently offering severance packages of up to €330,000 in production. Christoph Abeln, an employment lawyer specializing in representing executives, warns against hastily signing termination contracts. He emphasizes that while such offers may sound tempting, they can prove costly. According to the expert, signing prematurely can result in spending millions on employees who are expected to go.
In many instances, companies waste six-figure sums because better alternatives exist. The Handelsblatt article highlights the key details to consider during a severance negotiation.
Written by urgent.news from Handelsblatt's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
