In December, Mercedes-Benz will reopen its voluntary-departure programme, and this time senior managers are eligible for the first time. Around 5,500 people left in the last round, some of them with payouts in the high six figures. The coverage focused on the money, and almost nobody asked what happened to those people afterwards.
Mercedes is far from the only example. Across German industry, restructuring is being built around the Abfindung, and tagesschau reports that DAX companies cut 41,000 jobs in a year of record earnings. The cuts are also moving up the hierarchy. manager magazin writes that Germany’s corporations are “putting tens of thousands of managers out on the street” and that “the big wave is yet to come.” The head of Heidrick & Struggles in Germany told the magazine that severance packages are shrinking and that many managers now feel “like frogs in hot water.” Restructuring, as WFA has argued before, has become the operating model.
For the person leaving, the reasoning seems obvious
When an exit is on the table, Some companies prefer to offer more cash in lieu of career transition support. The company gets a clean break, and the executive gets a number that feels like recognition.
For departing executive, more cash means more money. If the next job comes along quickly, they win twice, keeping the severance and drawing a new salary at the same time. Seen that way, any offer of support in place of cash looks like a poorer deal.
That is the dilemma, and the bet rarely pays off the way it looks on paper. Handelsblatt made a similar point in September, noting that executives “usually have better options than a large one-off payment” and that “anyone who signs too quickly often loses money.”
The crown and the cement
Let’s make an analogy for a moment. Imagine an insured patient whose crown has come loose. The dentist could examine the tooth, treat whatever caused the problem and refit the crown, with the insurer covering the bill. Or the patient could take the money, buy a tube of cement at the pharmacy and fix it at home.
Doing it yourself is tempting, but it rarely goes well. The fit is slightly off, or a neighbouring tooth gets chipped in the process. Sometimes it holds for two days and then falls out again. Out comes the superglue, which holds but damages the tooth, and painkillers take the edge off in the meantime. But because nobody has looked beneath the surface, the real problem stays sealed in and the crown keeps coming loose.
A self-directed executive job search tends to go the same way. Someone who last looked for a job fifteen years ago often misjudges the fit, aiming at roles the market no longer associates with them, and then the interviews simply don’t come. Former colleagues get approached too early, too often or with the wrong request, and goodwill built up over decades starts to cool. The first round of applications brings some hope, followed by a string of polite rejections.
Some of the damage can’t be undone. A headhunter who meets the candidate before their story is clear may not call again, and a board introduction used too early is gone for good. Then comes the superglue, in the form of the first offer accepted mainly out of relief. All the while the severance works like a painkiller, keeping things comfortable enough that nobody notices how much harm is being done. By month eight, the repair is far bigger than the one that was originally on offer.
Why cash looks better than it is
Tax. Since 2025, the Fünftelregelung is no longer applied through payroll and has to be claimed back later through a tax return. Even then, senior severance is taxed at close to the top rate. Outplacement paid for by the employer, by contrast, has been tax-free under § 3 Nr. 19 EStG since 2020. Every euro spent on support reaches the executive in full, while every extra euro of severance reaches them after tax.
Policy is pushing further towards cash. Under the coalition’s July reform, Der Spiegel reports, people earning more than €177,000 a year effectively give up dismissal protection in exchange for mandatory, tax-favoured severance. For senior leaders, cash is becoming the default (see Germany’s New 34-Point Reform). That makes it even more important to be clear about what the money is meant to achieve.
Time. The double win depends on a fast landing, and fast landings are the exception. In Close Cohen’s Executive Transition Report 2026, only 26% of senior leaders had an offer within three months. One in three needed seven months or more, and a third still hadn’t landed by the end of the study. Cash can pay for a long search, but it can’t make the search shorter, and it can take away the urgency to get started. Sabrina Zeplin, whose firm supports large-scale workforce reductions, told Der Spiegel that many people “make themselves comfortable for too long” on severance and unemployment benefit. Large sums also run out faster than expected. When Mercedes offered managers packages of more than €500,000, employment lawyer Stefan Nägele warned that “half a million euros is often not enough.”
Networks. Senior roles are filled through relationships. In the same report, referrals accounted for 36% of placements and former colleagues for 32%, well ahead of job boards. These are exactly the connections that fade while an executive is busy running a business. Money can’t rebuild them, but the right support can, as long as it starts while the executive’s name still opens doors. WFA looks at this more closely in What Remains of Your Network When You Leave the Firm.
Pay the dentist directly
None of this is an argument for being less generous. It is an argument for spending the same money more wisely, by building transition support into the exit rather than writing a bigger cheque and leaving the search to the individual.
The company has good reason to do so, because its reputation is at stake. LHH found that 58% of white-collar employees would consider posting about their layoff online and that one in four lose trust in leadership after watching colleagues leave. The executives who stay are paying attention. When a company simply pays and walks away, it shows them what to expect when their own turn comes.
The executive benefits too. Given the choice between cash and help, most people take the cash, partly because of the double-win logic and partly because asking for help can feel like weakness at a moment when status is already fragile. If support is simply part of the package, nobody has to ask for it.
It does have to be the right kind of support. Generic outplacement, with CV workshops, group seminars and a login to a job portal, is the corporate equivalent of pharmacy cement, and senior leaders are right to turn it down. What makes a difference at this level is advice from people who have held similar roles themselves. That includes help with identity and positioning, reconnecting with a network that has gone quiet, and an honest view of where the executive’s experience is now worth most, whether in a full-time role, a board portfolio or interim work. This is what peer-to-peer executive transition advisory offers, and it is why executive transition is a board-level issue.
A question for leaders still in the seat
Sitting executives face this question twice. The first time is when they set the exit terms for their own organisation. The second is when those terms apply to them. Anyone who expects to leave in the next few years should think now about which kind of exit they would want, one that pays them off or one that prepares them for what comes next. You Took the Package. Now What? shows how differently those two paths have played out in the German car industry.
The leaders who handle transitions best treat them like proper dental care. They know the visible problem is rarely the whole problem, and that the cheapest option often turns out to be the most expensive, through months of drift, a quiet fade from the networks that once mattered and a next role taken mostly out of fatigue.
Cash has its place. But if the goal is a strong next chapter rather than simply bridging the gap, the better choice is to let someone qualified do the work, have the company pay for it, and start before the crown comes loose again.
If you or someone you know has the option to receive senior transition support, contact us. We are happy to provide you a free consultation.
