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Severance plans are typically based on X-many months equivalent, and that includes salary plus benefits. Likely may even cover cobra benefits once the active benefit coverage runs out… for those not familiar with cobra coverage, a single male coverage can be $750/month, when the company’s active plan premiums are <$200/month.
For example it may be:
3 months severance plus 1 month severance (pay, benefits) for every year you worked. So if you were there for 5 years, you’d get 8 months of severance. $63k per person for 8-month equivalent could roughly mean $40k salary equivalent and $20k benefit load for that time period.
So to me that means ballpark of a $60-70k salary (annualized benefit), which seems low to me.
But then again I’m rusty and haven’t run salary analysis in 5+ years.
A good chunk of their are MD’s.
You are correct. Back office staff should actually pay us to fire them.
Mck1 go home, you’re embarrassing us
Wasn't it 50% client facing with a significant percentage being MDs who probably get larger severages that skew the average?
Chief
Why? If they’re not selling or meeting sales targets, they’re the first and easiest to let go of.
Incorrect facts and assumptions. Not all are non client facing, and there’s a lot of top heaviness overall that skews the total.
Chief
Damn, time to move to Accenture for that sweet severance 🍬
Higher than giraffe ass
Rising Star
That’s mostly for optics to show something to Wall Street. Research shows laying off people seldom saves money for corporations
It’s lowers costs for sure but also revenue is most cases.
Even with the comment above about skewing high, 63k doesn’t sound super outrageous for severance costs per person
About half of the 19k laid off will be non-client facing people. The other half will be client facing. I believe for levels below manager, it will be one week pay per year you’ve been at Accenture. Higher than manager level, it’s two week pay per year you’ve been there but the payout is capped at either 8 or 10 years (can’t remember). So if you’ve been there 20 years you’re not getting close to 40 weeks severance
One week for one year? This is scary
Rising Star
When I was laid off from Accenture in 2020 I got 26 weeks severance (2 weeks x 13 years) plus six months of cobra payments. The cobra alone was over $12k. And they had to pay out about 220 hours of PTO.
I kind of lucked out as most of my years were with a previous company that got acquired and they counted for the severance time.
Rising Star
Because I never updated my title in here. No need to.
Y’all the average amount would also include payroll taxes and possibly other benefits. It’s fully loaded. You’d need to reduce it to get to salary
Rising Star
For someone making $240k, that’s like 3 months severance?
Probably the same sev as they did during Covid. A1 is right plus probably 750/ per person for laptop and some level of Corba coverage.
Bain, are you making $46K a year or so? What’s the deal with this question?
We don’t know what these non-client facing folks did and how long they had been there. Guy in corporate finance who’s been with the firm 15 years and is making $400k? He’s probably getting 6 months severance. Director in HR making $300k? $100k is about 12 weeks of pay. The packages are probably bigger for the higher ups. I’m sure not everyone is getting $60k in severance
Julie said about half of the 19k are non client facing roles
It’s not a linear distribution. Bi-modal distribution: high cost MDs and low cost back office.
TBH, I expected more out of you Bain. Please fix.