About four weeks ago, Accenture had decided to lay off about five per cent of its global workforce, which means about 10,000 employees in India. It has decided to offer the affected employees, supposedly low performers, a seven-month severance package. While the usual practice for companies is to offer a severance package of up to three months, or a month’s salary for every year of their tenure, Accenture is offering a significantly high payout, which includes salary for three months in lieu of the notice period, as well as four months’ salary for those opting to resign voluntarily.
Last month, Ford Motor Company had also decided to let go 1,400 employees in the US. The automobile company had offered a voluntary incentive programme or VIP, which included a lump-sum amount as severance payment for the employees who opt to and are approved to retire from the Company. The severance package included three months’ salary for those who have worked for up to seven years; six months’ salary for those who had put in between eight to 15 years of service; and nine months’ salary for those who had over 16 years of full service. Employees who had been in the Company for 30 years or were 55 years of age and served for ten years or were 65 years old with five years service could apply for the scheme.
Coca-Cola had also offered an attractive voluntary separation programme to its over 4,000 employees, which reportedly included a year’s pay along with a 20 per cent bonus for some of its higher ranks. It had offered this voluntary severance to about 40 per cent of its 10,800 employees in the US and Canada.