Transitioning from Verizon: Understanding Your Severance Package

In recent months, several of the largest companies in the IT sector have announced mass layoffs.

Most of the time, employers are not legally obligated to provide benefits or pay employees after their employment ends. However, they frequently have an incentive to do so in order to protect themselves from responsibility and to diffuse any tension by holding onto employees while they look for other options.

Some believe that severance is a reward for loyalty, while others see it as a very formalized version of the phrase "Don't go away mad, just go away."

You just got laid off. What should you do next?

Many employers are taking into account what they have to provide you in order to let you leave quietly because being laid off has a negative impact on the individual. They make an effort to lessen the blow,

Exit packages typically include a few conventional components, while the exact amount of severance paid to a laid-off employee varies greatly based on the industry, employer, and employee's employment.

What's in a severance package? 

The quantity and duration of an employee's additional compensation and benefits are the most negotiable aspects of a severance agreement.

Severance packages can include a mix of the following:

1. Financial compensation

2. Extension of health care and other benefits

3. A portion of one's bonus

4. Accelerated vesting of stock

5. Outplacement assistance or career coaching

6. 'We are seeing commonalities in things people are getting, but not the durations   We'll see the extension of benefits beyond the termination date, but as far as what those values are it depends on the company. There is no standard.'

The Worker Adjustment and Retraining Notification (WARN) Act requires the employer to give at least 60 days' notice if your job loss is a part of a mass layoff. During the notice period, employees are entitled to receive their entire salary. However, employers are not required to pay severance at all in the majority of other circumstances according to federal and state law.

They can give nothing.

How is severance calculated?

Some companies offer severance packages that include a week's salary for every year of service, while others may offer four weeks for each year of employment. It's the number of weeks you get per year, according to the algorithm. For instance, after a year of employment, a banking or financial services organization should provide a few weeks of severance pay.

Don't count on a bonus.

Although it's not typically covered by severance packages, a bonus that isn't part of an employee's base pay might also be quite beneficial. Performance-based incentives are paid in California in the same way as pay; employees are entitled to their earned bonuses in the event of their termination. There are less safeguards in place in other states. "I don't see people usually offering a pro-rated percentage of incentives, unless you're virtually done with your projected year. Usually, you lose that completely.

However, there is opportunity for negotiation based on the method of earning the incentive. "According to the bonus commission's phrasing, you could claim that the bonus has been earned up to that time if it is based on objective parameters that have been met.

Accelerated vesting
Because tech workers' compensation can be complex, their severance packages typically are, too. From small tech startups to giants like Google, stock in a company can be more valuable to a worker than salary.

'A lot of tech workers are really working for equity, stock options or equity grants, and these things vest over time,  'This is how most people who work for tech companies really make money." Whether you work for Google or a smaller tech company, you want a piece of the pie.'

In the case of a layoff, companies won't automatically accelerate the vesting of stock, in which case it disappears. But some will, including some of the large tech companies cutting their headcounts recently.

What did Google workers get?
Ex-Google employees bemoan the way they were notified of layoff. Here are the latest tech layoffs as the industry shudders.

When Google announced earlier this month that it would dismiss 12,000 employees, CEO Sundar Pichai told U.S. workers they would be paid during the 60-day notification period required under the WARN act.

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The company checked other boxes, too.

Employee benefits include expedited stock vesting and a minimum salary of sixteen weeks, with an additional two weeks for each year of employment at Google. The business promised to reimburse employees for unused vacation days and their 2022 bonuses. Additionally, it stated that it is providing six months of job placement services and extended health care benefits to its employees.

Microsoft announced on January 18 that it would be laying off 10,000 workers. The company also stated that eligible U.S. workers would be informed 60 days in advance of their termination and would receive an amount of "above-market" severance pay, six months of health care benefits, assistance with a career transition, and stock vesting.

Can you negotiate?

If you're not thrilled with the offer, it sometimes doesn't hurt to negotiate for a greater exit package, according to experts. But remember that larger organizations that are laying off huge numbers of employees are not likely to give in on a case-by-case basis.

Generally speaking, there won't be many exceptions to this rule for a mass layoff at these massive tech companies because doing so would open the floodgates. Smaller businesses may be more flexible because they aren't necessarily setting such a high precedence.

Bigger businesses are unlikely to change. Should your organization choose to fire 12,000 workers, everyone will beg to be changed for one guy. However, if you are the only one being let go, it is frequently worthwhile to attempt to work out a better leave package, particularly if you have a long tenure.

"Many of our clients receive significant improvements simply by asking for them. They are valued personnel who have typically been with the company for a while, and the corporation wants to keep things positive in the future."

Leverage goodwill you've earned over the course of your time at the company.