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United Separation Packages

Facing a historic collapse in demand and grim prospects of recovery, United Airlines is further incentivizing employees to accept voluntary separation packages with several enticing new benefits.

United Is Warning Of Steep Job Cuts In October

Although the CARES Act mandates that United abstain from any layoffs until October 1, 2020, United is already warning employees that steep job cuts will be necessary after that point.

Earlier this month, United tried to unliterary cut the hours of all employee groups using a loophole in the CARES Act. One union sued and United backed down, though the forced reduction in hours still applies to non-unionized management and administrative (M&A) employees. M&A employees must take one day of unpaid leave per week and also start burning their vacation days.

In order to avoid as many furloughs as possible, United is pushing employees hard to accept voluntary separation packages. Thus far, the number of takers has been limited, though United just sweetened the deal for M&A employees

United's New Travel-Friendly Separation Packages Offer To M&A Employees

Business Insider shares a leaked memo to M&A employees offering a number of new incentives for taking an early leave.

Key Facts:

Employees who accept the voluntary separation offer will stop working in June but be considered employed and on leave until December 1, 2020
Employees will receive full pay through June 30, 2020, then 33% pay between July 1 and November 30
Employer-subsidized healthcare benefits will also continue through November 30

In exchange for taking the early leave, employees may receive:

250,000 MileagePlus miles
Platinum frequent flyer status (unclear how long it is valid for)
Five years of active employee travel benefits
Retiree travel benefits after the five years
Priority access to job postings if the economic environment improves and they later wish to re-apply

Live and Let's Fly not been able to procure a copy of the full memo yet, nor will United confirm any of its details.

ETA: @xJonNYC got a hold of part of the memo, below:

Nice Offer, But…

It's an attractive offer in many ways. United already plans to cut 30% of M&A employees in October. The gamble then becomes will you survive or not, because if it does not appear likely..these are nice extra benefits.

Cynically, you could say there is no point in top-tier status or even non-revenue, space available (NRSA) flight benefits if you have no money to spend. Yet those 250,000 miles could go far on United's partners and having active duty boarding priority for pass travel will be immensely beneficial as more flights resume.

I had a friend once who worked for Air New Zealand. The airline went through a tough time and offered voluntary separation packages. He took it. Four months later, they rehired him. He kept all the benefits of the exit package and his additional salary on top of that. Then they did again, he earned additional benefits…and guess what? He went back to Air New Zealand a third time.

My point is that talented, skilled, passionate workers may lose their jobs, but when travel comes back (and it will…eventually) there will be a place for them if they have not already moved onto bigger and better things.

CONCLUSION

Live and Let's Fly has several contacts in M&A who we will speak to over the weekend about this latest offer, dubbed VSP2. While I appreciate the creativity, I have to imagine United won't get too many takers in this dismal job market.

Is Platinum status and 250,000 miles a smart incentive or an act of desperation on the part of the United?

image: United