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Intel Offers "Unsigning Bonuses"
Ratteau writes: "Forbes is running a story about an innovative method Intel is using to deal with the economic slowdown. Everybody has heard about cutting jobs, but what about the people that had been hired, given signing bonuses, and were to start in the future? Intel is giving them money to forget the whole thing (although there is nothing that says if they refuse, they wont be laid off the day they get there...) If I were a current employee, it would certainly make me feel good to know that they weren't going to cut me just to get cheaper labor in the door."
Here's what's happening at the company where I work (and I've heard of it happening at Intel too):
There's a quarterly review process and an associated ranking process (many companies have adopted this in recent years). I know that where I work they're looking at the bottom 5% of the rankings and they have given the folks in that catagory notice that if they don't shape up by the end of the quarter that they're shipping out.
This is effectively a form of layoff in a company which has a 'no-layoff' policy. It's cost effective; you don't need to pay any kind of severance package. What tends to happen is that if you end up in the bottom 5% bin it's kind of expected that you will quit since even if you do improve your performance substantially you'll always be under a cloud of suspicion.
Now, sure some folks will say "serves 'em right! If they're slackers they should be out of there!". Maybe so, but everybody's had a bad quarter or two sometime or other, haven't they? A quarter where things you tried just didn't work out, a quarter when you were depressed for some reason or other and it effected your productivity, a quarter where you had a disagreement with your manager. In recent years you didn't have to worry too much about that sort of thing, but now that the economy is slow companies are taking this opportunity to use this 'unlayoff' tactic.
I interned for Intel a couple of years ago (and also had a fulltime offer last winter until I decided to go to grad school), and I heard an interesting take on Intel's whole hiring scheme from a couple of employees. They said that if Intel needs 3 engineers, they'll hire 7 knowing that 4 will probably burn out in a couple of years. But the other 3 will advance quickly up the chain of command. Perhaps if they would simply change this policy (hire less people initially), they wouldn't have this problem. As for me, I don't know what decision I would have made had I decided to accept Intel's offer. I guess it would depend on the size of the buyout and whether I could find something else. Damn, I picked a good time to go to grad school ;-).
I have seen a number of articles about this in the tech press recently. Clearly most of the people writing (and reading) these articles are too young to remember the 1980's, much less the 1970's. This kind of thing was quite common at all kinds of large companies in the 80's when the economy was swooping up and down.
10 years of continuous growth was pretty neat, but I hope no one was deluded into thinking the businss cycle had gone away?
sPh
This practice is directed more at keeping the placement offices at large colleges happy than it is at keeping employees (or un-employees!) themselves happy.
During the 80's the several large employers were threatened with being banned from recruiting at leading engineering schools due to their practice of retracting accepted offers. Since being banned from, say, an MIT would be a bad thing when the economy starts back up, the practice arose of paying off the un-recruits to keep them from screaming back to the placement office.
sPh
I thought that MS Visual C++ would use Clippit:
"I see that you are converting from signed to unsigned. Would you like for me to show you what that will affect and how you will have to change your code? Do ya? Huh? Do ya, do ya? Come on! Let me help."
> It's a nice gesture to keep the employees happy, but in the end anyone buying an Intel based machine will pay for Intel's goodwill.
Oh come on. It is true, but same can be said for any company that chooses not to use child sweat shop labour. We're also paying for any company that hasn't moved to [insert name of country with lax ecological standards] so it can avoid paying to properly dispose of toxic waste!
No company should take flak for treating its workers decently or behaving responsibly.
Even Intel.
So, I guess this is good for current employee's but do we risk falling into the salaryman syndrom that Japan is suffering from right now. Current employees are locked in their jobs, but fresh blood is kept out. Will this limit innovation in the long term?
Plus as someone just about to graduate, I would be pissed if I lost the job that I have been promised and have been counting on for the last months.
-------------------------------END--COMMUNICATION
Most companies hire new graduates and insist on a mutual 1 year contract.
Are most of them mutual? I worked for my last employer for two months before getting canned in a big round of layoffs. I would have had to repay them for my relocation expenses if I had left on my own before a year was up, but there was nothing going the other way. They didn't owe me anything relating to that bonus, but they also didn't get it back. My new employer has a similar deal. I got a moderate signing bonus that I have to pay back if I quit, but they aren't obligated to keep me around for that year.
But gcc prints out a warning when I try to convert from signed to unsigned!
The shareholder is always right.
There was an article on the affect of losing company loyalty on the bottom line. Layoffs have a tremendous affect on loyalty, especially at a company like Intel. If you lay people off to avoid a short-term profit shortfall (and therefore are just propping up the stock price), you show people that they don't matter.
In this case, Intel isn't being a slime and rescinding offers (which can kill you at college recruiting, schools may ban you for a few years), and is offering to give them their signing bonus for NOT joining the firm. The recruit is happy (free money), the employees are happy (they aren't cutting staff to make way for the new people b/c of the intricacies of recruiting), and hopefully the company avoids burning money).
The short-term layoff strategy helps you in the short term, but alienates employees whose friends were let go. If you get fired for incompetance, etc., nobody feels for you. If you get let go because the company wants to keep its stock price up, that doesn't make the other employees feel valuable.
Regardless of Intel's other issues with employees, this move is a nice one.
Go Intel, you're being less slimy than a lot of companies I know.
Alex
Did you read the article? The people being given "unsigning bonuses" never worked at Intel. They are people who were recruited, signed an employment contract, were given signing bonuses, and haven't yet started working. The unsigning bonus is for them to forget about the employment contract because Intel overestimated their growth and recruited more people than they needed. It doesn't say anything about current employees leaving.
"Prefiero morir de pie que vivir siempre arrodillado!"
Untaken paid vacation time is a liability on the corporate balance sheet. Mandatory vacation time reduces the overall amount of it, hence improves the bottom line.
Secondarily, taking vacation time (years) later implies that the company will have to pay more, because of intervening raises.
This is part of why companies limit the total amount of vacation time an employee can accrue.
Wow! An Un-Signing Bonus!
What a great idea! I should go back to all of those places that have interviewed me in the past!
"I'm here to collect my unsigning bonus."
"What are you talking about? We only give signing bonuses to people we hire."
"Exactly. I looked at your business model and long-range profit expectations, and I want my unsigning bonus for thankfully not having to work here."
Thank you Intel. This is an idea that fits the New-New Economy perfectly.
This is INTEL we're talking about. Intel wrote the book on exploiting technical labor.
Take a look at FACE, Former and Current Employees of Intel. There are horror stories on the FACE site that I won't even go into. Suffice it to say, though, that Intel hires the cheapest pakistanis available, and treats their employees like crap.
If you have a problem with my views, REPLY, don't moderate!
If I was going to uproot myself and move across time zones, country borders, or even just 50-100 miles, I would REALLY appreciate it if the employer was upfront and honest me about my future with the company. I would MUCH rather be given the un/non-signing option instead of packing up and moving, only to find myself with a pink slip few months later. I think this saves their HR/Legal department some headache -- and to the employee as well... Dunno why ya'll are so angry about this... ...seems like a good move... it doesn't make me think of them as a wonderful company -- just a company with some rational sense.
...but hey, that's just me.
Particularly affected are the foreign VISA employees... They have to re-apply for their worker's VISA every time they get laid off...
It was a pretty sweet deal. I left the meeting extremely happy.
Intel has done things like this before. The money is just a way to stop lawsuits. Remember, a lot of these people might have quit their old jobs in preparation to work at Intel.
They're unemployed, and need to find a new job now because of Intel's decision. If I wasn't compensated, i'd most likely sue for my lost wages during that time.
Its a nice approach for Intel to go this route. The market is hurting, and many companies paid top dollar to get some top people from the field into their company, which hurts them in the long run to let them go, have business return to normal, then have to go back out and look for top talent.
By Intel doing this, they save face in the eyes of employees, and who's to say that when the market rebounds, Intel may need some of those people back. So ask yourself, if a company just chooped you, but wanted to rehire you, you'd likely be reluctant to return, but if a company that let you go, with an option like this stating "Look the market is bad, we appreciate you, but cannot afford you at this point, here is X amount of dollars." you'd definitely think about it.
This was one of the big problems with dot.dom's I saw when I went to sillycone valley last year, too many top people having to jump around from site to site, for whatever reason, I'd bank on Intel rehiring some in the future should the market get better for them, and I bank on some people returning as well.
360 degrees of Karma
The Immigration and Naturalization Service appears to be giving a break to foreign tech employees with H-1B visas who have been laid off.
This is coming as a pleasant surprise to just about everybody it affects.
Acknowledging the "turbulent time in the tech industry," an INS official said her agency will not force H-1B visa holders to leave the country if they haven't found new employment within 10 days of being terminated.
"We are going to let things slide," agency spokeswoman Eyleen Schmidt said.
In fact, that 10-day deadline may not even exist at all. Nowhere in the Immigration and Nationality Act of 1952 -- and its amendments, which contain H-1B provisions -- is there any language that stipulates a timeframe in which a terminated employee must leave the country before the visa expires.
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360 degrees of Karma
Employment contracts with Intel are "at will" - meaning that the employer *or* the employee is able to terminate the employment at any time, for any reason, with or without notice. This is noted in the article as well.
Every once in a while I like to masturbate a new word into my vocabulary, even if I don't know what it means.
I am graduating from Virginia Tech in two weeks and i was hired by Cisco to start thier Associate Systems Engineer program in October. They called me up last week and said, "Due to current economic....", but they are giving me 12 weeks salary. At $55,000 that is a nice settlement. Hopefully they will call me back later this year.