Top Firm Cuts Severance Package
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'To: U.S. Citi employees
From: Paul McKinnon, Head of Human Resources
Date: December 1, 2008
Subject: Amendment to the U.S. Separation Pay Plan
As you know, we've continued to review our policies and practices to ensure that they support our overall business objectives and remain competitive with industry standards. As a result, a decision has been made to amend the Citigroup Separation Pay Plan (SPP) for U.S. employees.
Effective January 15, 2009, the SPP will be amended to eliminate the supplemental severance payment that provides additional weeks of base pay to employees who had 10 or more years of service.
The basic severance benefit available to eligible employees - 2 weeks of base pay for each full 12 months of service to a maximum of 52 weeks of base pay - remains unchanged. In addition, the minimum severance benefits and COBRA subsidy currently provided by the SPP will continue to be available.
This amendment will apply to eligible employees who receive written notice of termination of employment on or after January 15, 2009. As always, Citi reserves the right to amend its plans at any time.
If you have any questions, please contact your Human Resources representative'.
The move by Citi is likely to be followed by other firms. Already stressed over lack of job security and facing a significant drop in compensation, the unlucky financial markets professionals who lose their jobs in this market are also likely to find that severance packages have been cut back when they are most in need of them.
Source - Dealbreaker
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