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Re-Organization and Layoff: Decision Making

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Re-Organization and Layoff: Decision Making
SAMANTHA STINSON
PHL/320
March 14, 2016
Jason Miller

Re-Organization and Layoff: Decision Making
Introduction
When a company chooses to conduct a mass layoff, the employees are not the only ones affected, the ethical business environment and economy are also at threat. Handling a company’s finances can be very puzzling and companies that find it difficult to overcome this task, experience a downturn, weakening business, and when this occurs, the need to find solutions to relieve their financial issues become critical. The purpose of this paper is to provide a recommendation from the two solutions provided in Week 4, how this solution benefits the middle-income customer, business decisions involved in the process, and what resources a company would need to implement that decision.
Employee Buyout
When a company is enduring extreme financial hardships, they may be able to encourage their workers to resign or retire voluntarily. “A buyout typically includes an offer of severance pay for a particular length of time and the continuance of other fringe benefits.” (D. Sullivan, 2016). The employer is entitled to negotiate the terms so they are not only favorable to the company but the employee too. A positive side effect the company gains from offering buyouts instead of laying off or firing employees can minimize possible lawsuits and bad press.
There are several laws and regulations that must be followed when pursuing the employee buyout decision. The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal law which makes it possible for you to retain health insurance coverages, if qualified, after you’ve been laid off. The cost of COBRA is typically an out of pocket expense, whereas before, the employer paid a large portion of the insurance premium. The only companies required to participate in COBRA

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