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Other factors included higher severance payments, changes in accounting for options, and more conservative assumptions related to the company's pension plan.
After price cuts by competitors, Mr. Virosque's company reduced charges for storage and transportation, and slashed its work force to about 170, from 250. "The worst thing is that we have to cut the young people," he said, because higher severance makes it too expensive to fire older workers.
Interpublic posted a quarterly net loss because of higher severance costs.
In Spain, from 2015 onwards, temporary workers receive a higher severance pay at the end of their contract.
For this reason, long-term part-time workers should benefit from higher severance payments as well as taxes for pension funds and unemployment benefits.
In the "Appendix" we present a model along these lines where it is shown that, for sufficiently low temp-to-perm conversion rates, a higher severance pay gap decreases OJT for temporary workers whereas it increases OJT for permanent workers.
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Mr. Basri said that legally mandated high severance payments were another deterrent to investment.
AND don't forget that executives' pensions are often based on the unusually high severance pay, which ratchets the numbers way up.
"I would assume the second quarter will also be a bit ugly" because of issues like high severance costs, she said, "but you get the feeling they are trying to turn this around".
But in clinching the $65.5 billion deal, they may have also inherited a headache -- the distinction of paying out some of the highest severance packages awarded in Europe in recent years.
For instance, a factory manager who was dismissed recently by a major beer manufacturer persuaded his employer to pay him an unusually high severance package, in part because he had all of his performance reviews, which had raved about his work.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com