Daily English 1296 Taking a Buyout

Dialogue/Story

Slow Speed begins at: 1:17
Explanation begins at: 3:17
Normal Speed begins at: 17:37

Complete Transcript

Welcome to English as a Second Language Podcast number 1,296 – Taking a Buyout.

This is English as a Second Language Podcast episode 1,296. I’m your host, Dr. Jeff McQuillan, coming to you from the Center for Educational Development in beautiful Los Angeles, California.

This dialogue is between Hector and Erica about someone leaving his job because he gets a lot of money from the company. Sounds weird? Well, let’s find out more. Let’s get started.

[start of dialogue]

Hector: So, are you taking the company buyout? It sounds generous.

Erica: Of course it’s generous. The company saves a lot of money by giving buyouts to senior employees with high salaries. What they get in return is a huge savings. I’ve been giving it a lot of thought, but I’m still not sure what to do.

Hector: It makes sense for me to take the buyout, since I’m only two years from retirement. It would bridge the gap nicely.

Erica: Yeah, but for someone like me? I’m mid-career and the job market is tight. There’s no guarantee I’ll land another job that pays as well as this one.

Hector: It’s tempting, though, isn’t it, to take a lump sum? You can take time to consider your options.

Erica: My options might be limited. No, I can’t take the risk. I’m staying.

Hector: Well, I’m leaving.

Erica: Sure?

Hector: Sure, I’m sure. A chance to say goodbye to the rat race? I’ll be the first one out the door.

[end of dialogue]

The topic of this lesson is about “taking a buyout.” Hector starts by saying, “So, are you taking the company buyout?” A “buyout” (buyout) is usually a large amount of money that a company gives an employee so that the employee leaves the company. Now, why would a company do that? Well, Erica explains why. It’s of course to save the company money. So, the company can hire cheaper employees. This is especially popular for older employees who are perhaps close to retiring. Hector says the company buyout where he works “sounds generous” (generous).

Something that is “generous” is more than what you are required or perhaps expected to do. It’s often used simply to mean “a lot.” “This is a generous amount of food.” That means it’s more than what you expected. It’s a lot of food. If someone says, “Oh, you’re very generous with your time,” that means that you give a lot of your time, probably even when you’re not being paid. The buyout, according to Hector, from the company is generous. Erica says, “Of course it’s generous. The company saves a lot of money by giving buyouts to senior employees with high salaries.”

A “senior (senior) employee” is someone who is high up in the organization – perhaps someone who has been there a long time, but definitely someone who is responsible for parts of the company or who has a lot of responsibility, and therefore probably someone who has a “high salary” (salary). “Salary” refers to the amount of money that you get paid every year to work for a company. If you have a “high salary,” you are getting a lot of money. If you have a “low salary,” like me, you’re not getting very much money.

Erica continues, “What they,” meaning the people who own the company, “get in return is a huge savings.” “To get something in return” means to receive something in exchange for what you have done or have given someone else. I give you $100, and I get in return a new phone, for example, or whatever you give me for $100 – maybe a new iPhone. That would be nice.

The company is getting, in return for its generous buyouts, “huge savings” (savings). “Savings” refers to money that you can use in the future that you don’t have to spend, or simply money that you decide to keep for a later day or for some other purpose. The company, by giving a huge buyout or a generous buyout to employees, then doesn’t have to pay those employees their salary in the future. Instead, of course, they hire or employ new workers who receive lower salaries.

“I’ve been giving it a lot of thought,” says Erica, “but I’m still not sure what to do.” Erica doesn’t know if she wants to take the company’s buyout. Hector’s says, “It makes sense for me to take the buyout,” meaning it’s logical or rational for me to take this buyout, “since I’m only two years from retirement.” “Retirement” is usually the period later in life when you stop working at a regular job and do other things.

The case for Hector is that he is “two years from retirement,” meaning he would probably normally retire two years from now. He says this buyout, if he takes it, “would bridge the gap nicely.” The expression “to bridge (bridge) the gap (gap)” means to make up the difference or to cover the difference between what you have now and what you need. What Hector means here is that it would allow him to survive until he is able to perhaps get his regular retirement pension or retirement salary that he will expect in two years’ time. The buyout would “bridge the gap.”

A “gap” is a space in between two things. In this case, I’m guessing, it’s the space between now – the space in time, if you will, between now and when he’ll get his “pension” (pension). “Pension” is money that the company or perhaps the government gives you to live on when you’re not working when you retire. Erica’s situation is different. She says, “Yeah, but for someone like me? I’m mid-career and the job market is tight.”

Erica says she’s “mid (mid) – career (career).” “To be mid-career” is to be in the middle of your professional working life. Normally, I would guess for most people, somewhere between, say, 40 and perhaps 55, although people are working more years than they used to, so “mid-career” might for some people be even older than 55. I hope I’m in my mid-career now.

Erica says the “job market” (market) is “tight” (tight). The “job market” refers to the number of jobs there are, or more generally to the number of companies looking to hire people and the number of employees, or the number of potential employees, looking for work. “The job market is tight,” Erica says. That means that there aren’t a lot of jobs that she could go and get if she quit the job she has now.

She says, in fact, “There’s no guarantee I’ll land another job that pays as well as this one.” A “guarantee” (guarantee) is basically a promise that something will happen in the future. Erica says there’s no promise; it’s not for sure that she will “land” (land) another job. “To land” something means to get something, especially something that is difficult to get. We often use this verb when talking about a job. “I’m going to land a job at this company.” That means I’m going to get a job at this company.

Hector says, “It’s tempting, though, isn’t it, to take a lump sum? You can take time to consider your options.” If something is “tempting” (tempting), it’s attractive. It’s interesting. It makes you want to do it. If I see a piece of chocolate cake, I may say, “Well, that is tempting,” meaning it makes me want to eat the chocolate cake, which of course I know I shouldn’t.

A “lump (lump) sum (sum)” is a large amount of money that you get all at one time. The word “sum” here refers to an amount of money. A “lump sum” is a large amount of money. The comparison here would be between a “lump sum” and payments of that same amount over a period of time. If I want to give you $500, I could give you $100 every month for five months, or I could give it to you in a lump sum – all $500 right now.

Erica says, “My options,” or my choices, “might be limited” – that is, I might not have the freedom to do what I want to do. Then she says, deciding against taking the buyout, “No, I can’t take the risk” (risk). A “risk” is the possibility that something bad will happen in the future. Erica says, “I’m staying,” meaning she’s not going to quit her job. She’s not going to leave.

Hector says, however, “I’m leaving.” Erica says, “Sure?” which is a short form of “Are you sure?” In this case, “Are you sure you are leaving the company?” Hector says, “Sure, I’m sure.” Notice there’s another use of the word “sure” here to mean “yes.” So, when he says, “Sure, I’m sure,” he means, “Yes, I am sure.” I am certain. I’m going to leave the company. I have decided.

He says, “A chance to say goodbye to the rat race? I’ll be the first one out the door.” The “rat (rat) race (race)” is an expression we use to describe the difficulties and the unpleasantness of trying to make money, especially when you are competing against other people in the same company or perhaps even in different companies. The “rat race” is the unpleasant aspects, the not-so-attractive things about working in a job, especially one where there’s a lot of competition, in order to make money.

Hector says he wants to say goodbye to this rat race. He wants to be “the first one out the door,” meaning the first one to leave the company. Interestingly, my father took a buyout from the school district where he was working when he was 59 and a half years old. He decided he was going to take a lump sum and retire early, and he lived a long and happy life, retiring at the age of 59. I hope I am as lucky as he was to retire early.

Now let’s listen to the dialogue, this time at a normal speed.

[start of dialogue]

Hector: So, are you taking the company buyout? It sounds generous.

Hector: It makes sense for me to take the buyout, since I’m only two years from retirement. It would bridge the gap nicely.

Erica: Yeah, but for someone like me? I’m mid-career and the job market is tight. There’s no guarantee I’ll land another job that pays as well as this one.

Hector: It’s tempting, though, isn’t it, to take a lump sum? You can take time to consider your options.

Erica: My options might be limited. No, I can’t take the risk. I’m staying.

Hector: Well, I’m leaving.

Erica: Sure?

Hector: Sure, I’m sure. A chance to say goodbye to the rat race? I’ll be the first one out the door.

[end of dialogue]

I guarantee you that if you continue listening to the wonderful scripts by our wonderful scriptwriter, your English will get better. That’s what you’ll get in return for listening.

From Los Angeles, California, I’m Jeff McQuillan. Thanks for listening to me. Come back and listen to us again right here on ESL Podcast.

Glossary

buyout – a large amount of money paid by a company to an employee in exchange for that employee leaving the company and no longer working there

* As a flight attendant, Jack made $65,000 per year. When the company offered him a buyout of $40,000, he took it because he was confident he’d be able to find another job soon.

generous – being willing to provide or share more time, money, or other resources than one is required or expected to do

* The job offer includes a generous benefits package that includes medical and dental insurance and a retirement plan.

senior – higher in an organization, with more power and authority than other employees

* Francine started working for this company as a receptionist, but now she is a senior executive.

salary – the amount of money that one receives each year in exchange for one’s work, not used to talk about people who are paid by the hour

* This position has an starting salary of $47,500 per year.

to get in return – to receive something in exchange for what one has given/done

* If I do this project for you, what will I get in return?

savings – an amount of money that is not spent and is kept in a safe place, such as a bank account, so that it can be used in the future

* How many years will it be before we have enough in savings to buy a house?

retirement – the period of time after one has stopped working and has time to enjoy the last part of one’s life

* Jerry dreams of playing golf every day during retirement.

to bridge the gap – to make up the difference; to cover the difference between what one currently has and what one wants or needs

* We don’t have enough employees to staff the store over the holidays, so we’ll need to bring in some temporary workers to bridge the gap.

mid-career – in the middle of one’s professional career, often in the middle years of one’s life

* We’re looking for a mid-career professional who has at least 15 years of experience in our industry.

job market – employers and people who are looking for jobs; the availability of jobs and workers, including how much money is paid to workers for their time

* The job market is very good for people with degrees in math, engineering, and computer science.

tight – with a lot of competition; with little availability, movement, freedom, or options

* Admissions at the top universities is always tight, but Kevin has good grades and good exam scores, so he will probably be accepted.

guarantee – an assurance or promise that something will happen

* The real estate agents gave us a guarantee that if he can’t sell our home within 30 days, he’ll cancel our listing contract with him.

to land – to get, have, or obtain something that is difficult to get, especially when it is partially based on luck or fortune

* How did you land tickets to that concert? I thought it was sold out.

tempting – attractive, making one very interested in having or doing something

* That chocolate cake is so tempting, but I’m trying to eat only healthy foods.

lump sum – a large amount of money that is paid all at once, not as a series of smaller payments

* Anyone who wins the lottery can choose to receive either a lump sum or smaller payments over the next five years.

limited – with restrictions; without full freedom to have or do what one wants

* The robot’s movements are limited, but our engineers are trying to improve it.

risk – a possibility that something bad, dangerous, expensive, or unpleasant will happen

* Opening a restaurant is a huge risk. What will you do if it fails?

rat race – competition among many people who are working hard in full-time jobs, trying to move upward in organizations to make more money and have more power and influence

* Why would you want to go to New York City and be part of the rat race? You can have a better quality of life if you get a job in a rural area.

Comprehension Questions

1. What does Hector mean when he says that the company buyout “sounds generous”?
a) The company made an unexpected offer.
b) The company’s offer isn’t fair.
c) The company is willing to pay a lot of money.

2. Why doesn’t Erica want to accept the buyout offer?
a) Because she’s worried she won’t find another good job.
b) Because she loves her job and would miss the company.
c) Because she doesn’t make her decisions based on money.

Answers at bottom.

What Else Does It Mean?

tight

The word “tight,” in this podcast, means with a lot of competition or with little availability, movement, freedom, or options: “With so many strong entries in the songwriting contest, the competition is tight this year.” If money is “tight,” there isn’t enough money to meet one’s needs or to cover expenses: “Harold has been unemployed for the past few months, so money is tight for our family.” The phrase “to run a tight ship” means to manage an organization or program very well and effectively: “Blake runs a tight ship, and her employees know they are each responsible for doing a good job.” Finally, the phrase “to keep a tight grip on (someone or something)” means to have a lot of control: “We need to keep a tight grip on our manufacturing costs.”

rat race

In this podcast, the phrase “rat race” means competition among many people who are working hard in full-time jobs, trying to move upward in organizations: “If you leave this job to stay at home with your children, you’ll never be able to join the rat race again.” The phrase “to smell a rat” means to believe that something wrong, bad, or illegal is happening, but not have any proof of it: “The fact that he wouldn’t make eye contact makes me think he was lying. I smell a rat.” The phrase “to look like a drowned rat” means to look very wet: “I got caught in the rain, and now I look like a drowned rat.” Finally, the phrase “to rat on (someone)” means to tattle, or to tell others about something wrong that another person has done: “I once ratted on your older sister for breaking my mother’s favorite ornament.”

Culture Note

Types of Buyouts

Companies may have several types of buyouts. The type of buyout described in this lesson happens when the company pays a “severance package” (a large amount of money and other benefits) to employees who agree to leave the company. By “letting go of” (having employees leave the company) “senior employees” (people who have worked somewhere for a long time) and replacing them with younger employees who have less experience and are willing to work for less money, the company can reduce its costs significantly. This type of buyout is most common when a company is “downsizing” (intentionally trying to become smaller, usually to increase profits).

Buyouts can also refer to times when the “controlling interest in” (ownership of) a company is “transferred” (moved; shifted) to another “party” (person or organization). For example, a “management buyout” happens when the managers in a company “pool” (share) their “resources” (money) to buy the company and own it together. An “employee buyout” occurs when most or all of the employees—not just the management team—pool their resources to do the same thing. An employee buyout is “commonly referred to as” (usually called) an “employee stock ownership plan” (ESOP).

In a “leveraged buyout” an “entity” (company) “borrows” (receives money from a bank with an agreement to pay it back later) money in order to buy a company, and the value of the company is used as “collateral” (the item that the bank will receive if the money is not paid back) for the “loan” (the money that is borrowed from a bank). This type of buyout is sometimes called a “bust-up takeover,” especially if the newly “acquired” (purchased) company is broken up and sold in pieces to repay the loan and make a profit.

Comprehension Answers

1 - c

2 - a