Employee Buyout (EBO)

Business Essentials Financial Terms Dictionary

Contents

An employee buyout (EBO) is when an employer offers select employees a voluntary severance pay.

The buyout package usually includes benefits and payment for a certain period of time.
Employee buyouts are used to reduce the number of employees and therefore payroll costs, benefit costs and any company contributions to pension plans.
Employee buyouts can also refer to employees acquiring the company they work for by buying a majority stake.