Should I take a buyout in a shaky job market? 5 tips to consider.
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Daniel de Visé, USA TODAYJune 28, 2025 at 4:05 AM
You've been offered a buyout. Your employer wants to pay you to quit. It's a big chunk of change.
Should you accept?
Companies offer buyouts to thin the ranks, spending money in the short term to save money in the long run.
Employers often leverage buyouts to avoid layoffs. And that thought, alone, should give you pause.
The Trump administration offered buyouts to the entire federal workforce this year, aiming to reduce it by as much as 10%. Roughly 75,000 workers accepted.
In the private sector, Google, UnitedHealthcare and Nissan, among others, have offered buyouts to U.S. workers this year.
Buyouts can sound tempting. A five-figure severance package might be the most money a worker has ever seen in one paycheck. But it's also the last paycheck your employer will give you.
"It's like lottery winners. Some people think the money lasts longer than it does," said Donna Walton, wealth strategist at TD Wealth.
If you are mulling a buyout, some considerations are universal: How large is the severance package? Am I close to retirement? Did I want to leave that job anyway?
But the current economic climate presents its own challenges.
Nearly 2 million Americans have been out of work for six months or longer, the Labor Department reported in May, the largest number in more than two years. The job market has slowed in recent months. Companies are doing less hiring out of uncertainty about President Trump's tariffs. Artificial intelligence is swiping jobs from new graduates. Recession fears loom.
"It is a very soft job market," said Michele Evermore, a senior fellow at the National Academy of Social Insurance, and a former Labor Department official in the Biden Administration. "It's such a period of economic uncertainty, I think people are hanging onto their jobs."
Here are five tips for employees who are thinking about taking buyouts in 2025.
Jessica Henry, a US federal worker at the National Institutes of Health (NIH) who was placed on administration leave at the beginning of April, speaks with a recruiter at a job fair event in Silver Spring, Maryland, on April 16, 2025.Ask for a buyout
Let's start with a proactive step. Maybe your employer hasn't offered a buyout. But you're restless to make a change, and you've heard your company wants to cut costs.
Consider approaching your managers and asking for a buyout. In many cases, there's nothing to stop an employer from creating a voluntary severance package just for you.
"You do see these things happen, particularly if there's news that a company is planning on downsizing," said Michael Scarpati, CEO of RetireUS, a financial wellness platform. "It's kind of a win-win for both parties."
If you're the first to ask for a buyout, you may get a better severance package than the one your employer eventually offers everyone else.
But don't ask for a buyout if you aren't ready to take one.
"You have to be willing to leave if they do offer it to you," Walton said. "It's not something you want to bluff about."
Negotiate the buyout terms
A typical buyout might offer four weeks of pay, plus another week for every year you've worked at the company. You might get extra health insurance coverage, even help in finding a new job.
Roughly half of workers accept buyout offers without negotiating, AARP reports. But it can't hurt to ask for better terms.
"Think of it as if you're going in for a job interview," Scarpati said.
You could ask for a full year of severance pay, rather than a few months. Perhaps your employer will cover the costs of health insurance while you look for a new job.
Some workers hire attorneys to negotiate buyouts, said David John, a senior strategic policy adviser at the AARP Public Policy Institute.
That might sound extreme, but remember: A buyout is a business proposition. The contracts can be complicated, sometimes including non-disclosure agreements or non-compete clauses.
Even if you don't bring a lawyer to a buyout negotiation, Walton said, "you should at least meet with one."
Test the job market
Unless you're planning to retire, experts say, you should gauge your chances of finding another job before you leave your current job.
If you work in a shrinking field, or in an economically afflicted region, you may already know it.
"It's a pretty different thing to take a buyout in D.C. if you work in a thinktank, or to take a buyout if you work on an oil rig in South Dakota," Evermore said.
Look at Labor Department jobs reports, Evermore said, to find out how many people are applying for unemployment insurance in your area, and how many are lingering on the benefit rolls.
Better still: Apply for some jobs. See if you get bites. If not, that might be a good sign a buyout isn't for you.
In the best-case scenario, you can line up a new job before you take the buyout.
A Federal worker (R) who lost her job gets help carrying some of her belongings from her office at the Mary E. Switzer Memorial Building that houses the US Department of Health and Human Services in Washington, DC, on April 1, 2025.Gauge the risk of layoffs
Many employers offer buyouts to avoid layoffs, or at least to delay them.
If you have a buyout offer, weigh the odds that the company will resort to layoffs once the buyouts are past.
"A responsible company will address those worries right off the bat, and say yes or no," said John of AARP.
If layoffs are likely, think about whether you might land on a layoff list. Ask your manager if you are vulnerable.
If your company has endured layoffs in the past, look at the severance packages those workers received.
In some cases, Walton said, a buyout package might be "the same thing your company offers you if it lays you off six months from now."
Take your time
Many federal workers who took buyouts from the Trump administration had only weeks to decide.
That's not nearly long enough, experts say.
"Asking someone to make a major life decision that may involve relocating your whole family, you should get at least a few months for that," Evermore said.
Ideally, Scarpati said, six weeks is a "minimum" timeframe for a buyout offer. Ninety days is more reasonable.
Use that time to "think about where you're at in your career," Evermore said. Talk to friends, colleagues and loved ones about your options. Test the job market. Ask yourself if you're ready to uproot your household and move across the country.
And run the numbers. If you are mid-career, do you have enough emergency savings to survive a period of joblessness? How would you cover health insurance? How generous are the unemployment benefits in your state?
If you are near retirement: When were you planning to take Social Security? How would you cover health insurance until Medicare kicks in? Do you have enough retirement savings?
Consider meeting with a financial planner.
"Ideally," Walton said, "have this financial plan done before any of this happens."
This article originally appeared on USA TODAY: Should you take a buyout in a shaky job market? 5 tips to consider.
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