EQ Bank Savings Plus Account

Financial Issues With Severance

in Debt Reduction, Nortel, Unemployment

This was written about 8 days after I had been laid off from Nortel, I was still in shock and in hindsight quite naive about getting severance, and how lucky I ended up being, getting what I got. Many folks I worked with got less than a chair for their severance, and I thank my lucky stars that I somehow came out doing OK from this whole thing.

Having worked in High Tech for 20+ years, I have heard many tales about lay offs and how they have “gone down” for some of the High Flying start ups of the late 90’s.

Nortel

I did get severance but many didn’t

One former colleague told me about how his severance package was his laptop PC, and his Aeron chair (the company had burned all of their cash and the receivers were coming to take everything that was not nailed down). Another told me about getting two weeks notice, and a promise of a package, which never materialized, because creditors got wind of it, and garnished it from the company.

I am luckily nowhere near that situation, if anything, this is a financial opportunity for me, and I am going to have to learn a great deal about the Canadian Tax system in the next few weeks. I was under the naive assumption that it would be relatively straight forward with my severance package, but that is not the case. There are options and scenarios that I must think out and figure out what the optimal financial model will end up being for me (given my age and current financial status).

My vagueness in my description is intentional because I am just not sure about a lot of the financial twists that will be transpiring in the near future.  I will also need to build a certain amount of “crystal ball” gazing about what I think may be happening in the future and what will be important to me as well. Some of the points already in my mind to think about are:

  • Do I think I can find a job very soon (i.e. the next month or so)?
  • Will I find a comparable paying job in the near future (next 4 months)?
  • Which is more important Debt Reduction or Retirement Savings? (right now the answer is both, with an emphasis on Debt Destruction).
  • Do I need benefits in the near future? Yes, I think so.
  • Should I keep the life insurance from my previous employer? Yes!

Only some of the simple concepts and ideas I must weigh in any decisions in the next month or two.

More likely I will be writing my opinions up, as much for me to think and read my own thoughts, but also looking for any input from my highly gifted readership as well.

{ 1 comment }

  • LAL August 8, 2008, 12:46 PM

    Have you filed for unemployment? Having lived through multiple layoffs and my DH did one stint, it’s not fun but it’s okay.

    In the US (we both work tech), they never fire on a Friday. Why? You can’t file unemployment that day or the next so you’re pissed over the weekend. They try to usually lay off wednesday or thursday.

    I have a friend whose badge didn’t open the door when he tried to get in. Classy! Jerks.

    That as they say is life.

    Hope you get a nice severance. My DH in December of 2007 was given his serverance package if the company was bought. It wasn’t, but it was the “poison pill” that the company had put in place in case of a hostile takeover. They would have to give all employees a very generous severance package.

    Cheers!

    Reply

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