Jobless Managers, Executives Face Double Hit

Compiled By Jill Jusko Executives and managers who lost their jobs in the first quarter of 2002 got an additional double-dose of bad news: lower severance pay and longer job searches. Discharged managers and executives averaged eight weeks of severance in the first quarter, down 33% from the 12-week severance package in the same quarter a year ago, says Challenger, Gray & Christmas Inc., an international outplacement firm based in Chicago. At the same time, the average length of job searches for those workers increased to 3.4 months from 2.3 months in the first quarter of 2001, shows the Challenger quarterly Job Market Index. The eight-week severance is the shortest since Challenger began tracking the data on a quarterly basis in 1991. As recently as the third quarter of 1999, severance reached a record 24 weeks. The firm said typical severance agreements, broken down by job title, are as follows:

  • executives: one to four weeks of pay for every year of service with a minimum of six to 12 months.
  • middle managers/technology professionals: one to two weeks of pay for each year of service with a minimum of three to four months.
  • rank and file: one week of pay for every year of service, with a minimum of zero to one month's pay.
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