United COO to employees: Consider voluntary separation / New 2021 separation program
 

"In a memo to some United Airlines staffers, which was obtained by CNN Business, Greg Hart — the company's chief operations officer — said the airline will need to "right size" its workforce.

"You may want to seriously consider if you're in a position to take a voluntary separation," Hart wrote. He added, "You, alone, can decide if a [Voluntary Separation Program] works for you and your family.""

https://www.cnn.com/2020/05/04/business/united-voluntary-separation/index.html

While difficult to read - you have to feel bad not just for UA employees for airline employees in general - these are the kind of messages UA needs to send to its employees - which is, don't wait until Oct 1 to lose your job if you can find something else sooner.

There was an article this morning about 30% pilot reductions. This quote from UA's Chief Pilot was disturbing:

“This displacement bid aligns pilot staffing to a schedule reduction of around 30%, yet our schedule in May, and our expected schedule for June, is reduced by 90%. No one knows when travel demand will return, so unfortunately, the results of this displacement are likely to be a baseline from which future displacements are conducted.”

Is he saying pilot reductions will be proportional to schedule reductions? If that's true for other functions (FAs, mechanics, etc.) then UA might go from 100,000 employees on Jan 1, to 10,000 employees on Oct 1? That would be a tragedy.

This mess hits us on the corporate side later this month - mandatory 4-day work weeks for the foreseeable future with layoff announcements in mid-July (for an October 1 effective date). I can't even think about it this evening -- working for an airline is all I've ever wanted to do. I have no idea what will happen if I lose my career halfway through it :(

This is going to be a horrible 2020.

SteveHK, I'm sorry.

What a gut-punch. The only thing I ever truly wanted to do was work for United; I could never find my “in”. For the first time I’m glad I didn’t. A very heartfelt sorry to all UA employees - this is such a mess.

I don’t know how unemployment insurance works but this may be an attempt by UA to limit it’s payout for the thousands they’ll let go in October. As far as I know if you voluntarily separate you get zilch in unemployment benefit.

UA has sent a memo to employees today citing a 30% management reduction effective October 1. For WSJ subscribers: https://www.wsj.com/articles/united-...30-11588645117

You were the one saying that UA could just "lay off" everybody who wasn't on a "profitable" route, and they'd be in "great shape." Which is it?

Laying off a large number of people would cause a rise in your unemployment insurance premiums, but to the extent, if any, that this is financially motivated, it's more likely to be about avoiding severance pay. I don't know United's severance policy, but if it's like most large companies, I imagine it's based on X weeks of pay for every Y years of service. But that's just speculation -- there can be a lot of non-financial motivations to offer a program like this too. Even if you don't save a single dollar over involuntary separations, every resignation may mean one fewer layoff -- one more person who really needs the job who gets to keep it, perhaps.

How long until others announce the same thing? DL, AA, B6, WN, F9, NK? UA can't be alone in the pain.

I doubt it's about severance pay. wouldn't the severance between a voluntary separation and a layoff be similar? i would think the point of a voluntary separation is to first give it to the people who want it. at least that's been my experience in the 3 or so cycles i've worked on corporate downsizing. it's kind of geared towards those people who you hear say "gee, i wish i got laid off"

While there are obvious benefits if employees voluntarily separate, it seems a good part of this is -- don't try to hang on thinking this all will fix itself in a few months, use the next few months, while still with some income, to get a new start somewhere else. Don't wait and then find yourself with nothing.

This will be a hard reality for many but the sooner you start the better chance of having a better outcome. (speaking from some experience).

Yes, that would be typical, but if you start from the assumption that UA is doing this as an underhanded way to save money, then perhaps they'll offer a discounted package to people who are looking to leave early... Or maybe they're hoping people will just quit, without any package, because they found another opportunity and don't want to risk losing it by waiting for UA.

I doubt that this is actually intended as a way for UA to save this relatively small amount of cash, but if it were, that's how they'd do it.

So we taxpayers gave United, and other carriers, billions in bailout money with the result being a massive cut in service and coverage and a plan to decimate the workforce the moment the no-layoff restriction is lifted at midnight Sept 30?

I think we've been taken for a ride on this deal - the bailout should have required an immediate layoff so people could collect unemployment with the $600 subsidy today through end of July and regular unemployment through end of the year, with a requirement for 75% or better payroll restoration no later than January 1, 2021, or the government would assume full equity ownership of the carrier until the loan was paid back. What idiot inked this dumb arrangement?

Unless we see a big bounce back in the economy within 30-45 days, which is unlikely, I am hopeful the morons in Washington will extent that $600 through end of the year. It can make a huge difference for people who are laid off in an industry where finding replacement work is not easy.

I too don't understand why people would voluntarily leave if there is no severance package and no unemployment. What is the incentive?

If the hope is some will leave voluntarily to save others' jobs, my observation is that you can end up with the most capable and marketable employees leaving. That is not what a company should encourage.

UA employees, before deciding what to do, read up on the WARN act. It will likely be triggered in every major UA office.

BA has recently announced ~30% reduction. They will all join the rest of the herd soon.

While this is good advice in general, notification in July of a layoff on October 1 appears to be within both the spirit and the letter of the law.

Smart people would only voluntarily leave if they have a new job.

While airlines certainly have a lot of very specialized jobs, they also have people who can easily use their skills in other industries.

Obviously, Flight Attendants and Pilots aren't likely to easily find a new job before October. But, ramp workers might be able to find a job in logistics. Ticket/gate agents might be able to find customer service positions. And employees at the call centers might (rather easily) find work at other call centers.

Stuff like that.

I think that even outside of the airlines this world is about to enter a period of economic feudalism the like we have never seen, and certainly never experienced, before. These are dark times.

Am I the only person to find the use of the term "separation" here cringeworthy? Why this continual obsession with mis-using longish words in corporate speak in the US nowadays?

We discussed this before. It is not a directly proportional relationship to the entire workforce.

If the zero-demand/zero-revenue environment is still the case in October, we are looking at a collapse of the global economy and most assuredly the end of the line for most airlines.

At this point, 30% cut (2020 vs. 2019) is the target for most airlines, but this is definitely a “plan for the worst, hope for the best” scenario. 6 weeks ago, a transient 70% demand drop was a worst-case estimate. It’s incredible to consider the speed and intensity with which this situation evolved.

considering the age of the FA's
 

Vol separations may make sense for UA.. They last went into bankruptcy in 2002, when their pension plan was replaced with a savings plan. That helps explain why I see so many FA's working who are over age 65. Withour a pension, the main incentive to continue workig is/was the travel benefits. The value of this benefit has been significantly reduced, so why not separate?

Youre assuming companies are hiring. At 25% unemployment, I don’t think finding a new job is possible for significant numbers of UA employees.

Wow. This is horrible news. I feel so bad for all those United employees who have to find new jobs. United must really for fast that things are going to be bad if their laying off 30% of employees. What if things get a lot better much faster. What will United do. Let’s hope their like a whether man.

That is true with all of the stimulus programs: a one-time $1,200 payment, the $600/week extra PUA for a few months, super limited/restricted PPP, and the nearly nonexistent EIDL and it's ghost-sibling, the EIDL advance. The American government cannot afford to keep band-aiding these massive wounds indefinitely. And they surely can't prop up United or any airline until the goalpost of having a cure/vaccine is hit ...if it's even possible. And this disaster is not just with the travel industry: it is wide and deep across most. {removing OMNI topics} there's only so many levers you can pull when the economy is effectively shut down indefinitely.

After 20 years of feeling like I've been hanging on by my fingertips I can honestly say I'm done. I've elected Voluntary Separation taking the severance and looking forward to doing something else. I put my resume out yesterday and have two interviews tomorrow. I'm looking forward to my next chapter.

Good luck to you & your future!

It serves as a reality-check for people to take control of their own destiny rather than wait for someone else to make the decision for them. If you were considering a new career or going back to school for an education in something different, it may be a better to plan that route now rather than wait until October when it may be too late to enroll in or try something new. If someone was on the fence about whether or not their job was viable, now would be a good time to update the resume and get it out there now; that would give you at least 4-5 months lead ahead of the inevitable downsizing coming in the fall.

And even if there was significant "voluntary separation", they'll still need to make even more significant job cuts if demand remains non-existent.

I think over the last few years, the amount of money/cash UA was making, they were literally creating/making new positions left and right. I believe they've become way to heavy in Sr Managers and above. I will always believe in great opportunities for a company, one still needs to look at are we making positions just because or do we get a good ROI on this position.

This. A lot of people are out of work right now, and while the service industry has been hardest hit, it's starting to hit a lot of people. I know someone whose husband works for GE and they're laying off a significant number of people in the engineering department apparently (with more to come in the summer). Universities/schools are suffering, hospitals are laying off tons of people, etc. More and more people starting to get impacted.

There's a reason experts predict a double-digit unemployment rate (11-16%) into 2021.

Saw this report from Reuters, United Airlines to cut 30% of management in October, preparing pilot changes too: company memos

yeah, and on top of that, employees have to take 50% of their vacation prior to September 30. that sucks when you are stuck at home! But, now employees are also on 4 day work weeks for M&A.

I'm not sure about that. I could see airlines operating at 10%-20% of capacity because people don't want to confine themselves to a small metal tube, for hours at a time, during a pandemic with a 3% fatality rate.

That doesn't mean the global economy collapses. It's just means airlines will be extremely hard hit until a vaccine is found and distributed.

Would it make more sense for pilots and FAs to go part time? This would help ensure junior employees still have some employment as well. It is not ideal for anyone, but I am always surprised how junior people seem to sacrifice so much so people with more years can still have a job. In most industries people across the company take pay cuts so their are fewer furloughs. I am just wondering if this is an option. I feel really awful for all the great employees at UA and think pay cuts might be able to save jobs. Best of luck to all who work at the friendly skies. I hope to fly them again soon!!

Why should airlines get a different deal than any business who applied for a SBA PPP forgivable loan who are required to maintain their payroll? And now people will be let go with only basic unemployment insurance payments unless they leave on their own now and forfeit access to higher unemployment payments?

It has to be coming IMO. Boeing announced voluntary and involuntary layoffs as well. I mean, how can UA buy planes from them if they can't even make payroll? The part that gets me is that when it's all over, has the landscape of business travel changed permanently? After 6 or 8 or 12 months of virtual meetings, do they become the norm? It's a massive cost savings even though in person meetings are more efficient (and productive IMO), so businesses may not want to return to the prior system.

While understanding the governmental financial resonse to COVID situation is ripe for discussion with CARES, PPP. .... that is a political / OMNI discussion out of scope for the UA forum, but is being discussed in Covid-19 US tax cuts or fiscal stimulus

Please let's stay focus on UA / UA employees and our travel on UA for this forum

WineCountryUA
UA coModerator

This thread was started to discuss the fate of UA employees, there have been a few prior more general fate of UA threads

UA life post COVID-19 recovery
UA Viability/ Chance of Bankruptcy/ Bailout discussion in COVID-19 Era [Consolidated]
Can UA survive? Opinions on its future

You mean we should use longish words like "sacked" like England does?

:rolleyes:

In the long run, yes. However they're not yet saying October schedules will be at 10% levels.

The feds funding the employees through the airline keeps their insurance benefits going, which unemployment wouldn't get them. $600/week would be going to COBRA.

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The pension wasn't wiped out, but it was transferred to the PBGC, but that was two decades ago.

fact checking a misleading post
 

With respect, you are obfuscating my point.........airline crew work for a pension & travel benefits. When UA went bankrupt, they lost their DB pension plan. Yes, it was two decades ago, but so what?? They are today being asked to voluntarily separate. I live on my pension and I did not lose it as a result of a bankruptcy.

If you are going to recite history, please be accurate. Thank you.

Those who had it, kept it; UA stopped adding to it. The 65 year olds you mentioned have had the two decades I mentioned to put aside their own savings on top of whatever pension they had pre-9/11.