Canadian Personal Finance Blog

Severance and Redundancy

Those of you who are regular readers know that I work in the High Tech industry at a large telecommunications company, that was until Wednesday July 30th, when my position there was declared redundant and I was given a severance package.

This is not a parable or a story on my part, this has actually transpired, I am now gainfully looking for employment after 20 years of work at the same company. As I mentioned yesterday, this is most likely going to temper and change the tone of this blog, to be less “savings” oriented and more “survival” oriented. As most can tell, I write about things in the financial area that matter to me and to my family, and this kind of upheaval and change is bound to cause a thematic change in my writings (at least for now).

I have spoken to many people about this already (including most of my loved ones, hopefully no more are learning from odd places, as my Brother learned from a comment I left on an industry web site), and I have already “activated” my network of contacts for job searching.

I am open to requests for articles or requests from my readers about this event in my life, however I must say that legally I am not allowed to say how much my severance package is, and there are some other points I am not supposed to discuss, that I can’t remember. I will say that it is very generous (but it should be given I have been there for 20 years, and am now 47 years old), and I have been given access to a firm that will help me get ready to find a new job.

I am also eager to hear of stories of redemption and success in this area, as well as helpful tips on how to survive and better still overcome this tumultuous event in any worker’s career.

Excellent Layoff and Severance Articles So Far

• Gail Vaz-Oxlade has written this excellent article: 9 Things to Do If You Lose Your Job . Good reading.
• Canadian Capitalist made a post a while ago (and he and I have spoken in E-mail about this situation already): Surviving a Layoff .
• Uncommon Sense also lays out some important points in: 14 Tips For Living Through a Layoff

Today, I celebrate my 20th year at my current High Tech employer. When I started 20 years ago, the PC was something new, all computing was being done on Mainframes and the cell phone was only just beginning. Today a complete generation of high tech gizmo’s have come and gone from when I started working in High Tech and things that were deemed impossible when I was at University, are now common place and easy.

Will I last another year? I have no idea, but that is the joy of working in High Tech, you might go the way of the Atari 800 or the Vic 20, if you aren’t careful!

Twenty Years Ago Financially

Twenty Years ago about now, we’d seen Black Monday the first of many market corrections, and the second biggest single day drop in the history of the stock market (ok that was 21 years ago, but still topical).

In 1988 my salary then is now 25% of what I currently make, which is mind blowing, except that I haven’t seen a raise in 5 years either, which is a bad thing. The Savings & Loans scandal rocked the U.S. economy (glad to see THAT could never happen again (what IS the font for sarcasm?)). The Solidarity trade union goes on strike for 3 weeks in Poland, with Communism starting to show it’s first cracks. Free Trade between Canada and the U.S. was brought into law as well (I remember those arguments, what were they about now?).

Some stocks of interest on July 18, 1988:

• Nortel was at $19.00 in US trading back then
• Microsoft was at $68.50
• Berkshire Hathaway “A” were about $4350 (US)
• IBM was at $125
• Pfeizer was at $50.50
• CSCO, DELL and RIM were not even listed (heck, RIM hadn’t even been thought of yet).

That summer Canadians got to live through the indignity of the Ben Johnson scandal at the Seoul Olympics too! Luckily 1988 gave you Prozac as well, so you could feel better about things too.

Holy cow, I am an old fart. Have a good weekend all.

The Royal Bank published a report effectively saying, “Relax, it’s only a bump in the economy“, with a forecast that things economically will not be as bad as first predicted.

The full economic report by Craig Wright the Head Economist at RBC is actually a nice read, with a province by province break down of what the predictions for the coming few months might be.

Being a bit of an inflation zealot I did think the following paragraph is quite interesting:

The RBC report forecasts that Canada’s core inflation rate will likely trend higher this year though remain below the Bank of Canada’s two per cent target. Mitigating factors that have pushed the inflation rate lower, such as the impact of the rising Canadian dollar in 2007 and the retail discounting that Canadian companies have had to offer to compete for market share, will start to dissipate through 2008. By 2009, RBC expects the inflation rate to average close to the two per cent range.

This seems to imply that the rise in Gasoline price will either have subsided or have been absorbed into the economy (or maybe it might drop?). Interesting prediction, I don’t agree with it, I think it is an overly optimistic view.

For Ontario, a little more gloomy:

Ontario is labouring through its softest patch since the early-1990s recession.The provincial economy likely contracted in the first quarter and should
recover only gradually through the remainder of the year.

I think I agree with that sentiment as well.

It’s always important to read these kind of reports to understand the Macro Economy around you, even when you are someone like me who looks closer at the Micro-Economic conditions.

Happy 4th of July

To our American cousins and neighbours we wish a happy 4th of July, and hope you enjoy blowing things up and the Boston Pops.