A lot of people want to quit their jobs at Verizon, and that's a really good sign for the economy. In a drive to cut costs and shift investments as it rolls out 5G service, the company announced on Monday that 10,400 management employees had accepted voluntary buyout deals, out of 44,000 who were eligible.
That might have been partially due to the fact that the terms of severance were generous, at three weeks of pay for each year of service, capped at 60 weeks.
But it's likely there's a larger factor at play: The unemployment rate is now 3.7%, compared to 5.8% when Verizon last offered buyouts, meaning those workers figure they have a good chance of taking the money and finding another job.
“The hotter the labor market is, the more likely people are to say, 'Sure, I'll take this, thank you very much,'” says Peter Cappelli, director of Wharton's School of Human Resources at the University of Pennsylvania. “You wouldn't have had many people taking it in 2009.”
The buyout isn't the largest in Verizon's history. In 2003, 21,600 people took a voluntary buyout, with a two-week severance offer that was much less generous than the deal workers are being given now. That package was offered to far more workers — 152,000 — so the overall takeup rate was just 14%, as opposed to almost 24% of eligible workers this time around.