BellSouth boosts earlier severance plan

I received this via email from one of my old co workers from Bellsouth (she is still there).

BellSouth is boosting a previous severance plan, thanks to the emergence of a better deal tied to the expected purchase of the company by AT&T.

The plan involves job cuts that were announced in December, before the AT&T deal. In filings with the Securities and Exchange Commission Monday, BellSouth disclosed that, for director-level managers and others in management, the company now plans to pay severance equal to 7 percent of base salary per year of service — in other words, someone with 15 years at BellSouth would get a payment equal to 105 percent of their salary. The previous total was 5 percent per year of service, equivalent to 75 percent of pay for someone with 15 years of tenure.

BellSouth also is raising the maximum payout an individual can get to an amount equal to 150 percent of their base salary, instead of the previous cap of 120 percent.

The severance deals revolve around BellSouth’s plan to cut 1,300 management jobs. Originally, the target was 1,500 positions and would have been a mix of voluntary and involuntary cuts. The company said Monday the cuts will now be voluntary only. Some workers at the level of senior director and above have already accepted buyout offers under the previous, less attractive terms. BellSouth spokesman Joe Chandler said the company is still evaluating what the impact will be on people in that group.

Those staffers could have their severance packages adjusted. The revamped amounts mirror a severance plan that will be used after AT&T buys BellSouth. That deal, which is expected to close within 12 months, is expected to lead to cuts of about 10,000 jobs. Many will be lost to attrition, AT&T has said, although cuts are expected, particularly in Atlanta.

Because of changes in the previous plan, BellSouth is adjusting how it will account for the 1,300 job cuts. The company disclosed Monday it now expects to spend $107 million after taxes on the reductions, spread over 2005 and 2006.

Posted by loni on 03/14 at 11:16 AM in Blogging

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