These are the severance packages tech giants like Google, Meta and Amazon are offering...

Tudor Cibean

Posts: 171   +11
Staff
The big picture: Many tech companies saw record profits during the pandemic, which prompted them to increase investments and rapidly expand their workforce. However, with rising fears of a global recession, more and more have recently announced mass layoffs affecting thousands of employees.

In the first three weeks of this year, over 100,000 workers in the tech industry have lost their jobs. A new report shows that severance packages vary greatly from one tech giant to another.

On Friday, Google parent Alphabet announced it was laying off 12,000 employees, about 6 percent of its global workforce. According to an SEC filing, severance packages for US employees include 16 weeks of salary and accelerated share vesting plus an additional two weeks for every year of employment at the company. Laid-off employees will also receive their 2022 bonuses, paid vacation time, and six months of healthcare.

At the beginning of the year, Amazon confirmed it planned to let go of a record 18,000 employees, representing about 1.2 percent of its total workforce. Retail US employees will receive full pay and benefits during the mandatory 60-day notice period without being required to keep working. The company will also offer multiple weeks of severance, a separation payment, transitional health benefits, as well as job placement.

Meta CEO Mark Zuckerberg announced last year that the company would cut over 11,000 jobs worldwide, about 13 percent of its workforce. Laid-off employees were promised 16 weeks' severance pay along with two additional weeks for every year of service. The company said it would also cover their health insurance for six months and offer RSU vesting, career services, remaining paid time off, and immigration support for staff with visas.

Salesforce recently announced that it would lay off over 7,000 employees, with CEO Marc Benioff suggesting younger remote workers might be to blame for the company's falling productivity. Severance packages include at least five months of pay, six months of health coverage, and two months of outplacement support.

Twitter CEO Elon Musk initially planned to reduce headcount by 50 percent after he took over last year, though many more chose to quit rather than commit to the new "hardcore" work culture. Later, Musk claimed that everyone who left was offered three months of severance pay.

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Plutoisaplanet

Posts: 885   +1,411
I was just thinking about it, and a lot of benefits come with the timing of layoffs taking place after the new year begins. Emotionally is the main one (it’s always bad when someone gets laid off before the holidays). Tax reasons is another—if severance is a lump sum before the end of the year, it could bump them up a tax bracket come April. And finally, layoffs are always expensive and Q1 financials are typically the weakest anyways, so investors tend to be more understanding with impacted short term results here.
 

bviktor

Posts: 1,146   +1,681
Looks like tech companies are competing who can layoff the most. Not only in america, in my country tech layoff is happening as well.

What a trend
I'm almost certain this is all about just "refreshing" the work force. Get rid of the lower bracket, then start anew sometime later, slowly. Their financials don't justify these layoffs in the slightest, so this might be it. And if "everyone's doing it", it'll raise much fewer eyebrows...
 

PEnnn

Posts: 1,006   +1,358
I'm almost certain this is all about just "refreshing" the work force. Get rid of the lower bracket, then start anew sometime later, slowly. Their financials don't justify these layoffs in the slightest, so this might be it. And if "everyone's doing it", it'll raise much fewer eyebrows...

Or, which is quite often the case, get rid of the highest paid ones and hire ones at much lower salary level.

Ask me how I know....
 

Endymio

Posts: 1,916   +1,995
Their financials don't justify these layoffs in the slightest, s
I realize it's not as much fun to learn about a subject before spouting off about it, but Amazon missed earnings estimates once again; year-over-year they've dropped by a third. Based on their last quarter, their EPS is 121.5, meaning a new investor in Amazon would have to wait nearly 122 years to regain their initial investment. A tiny startup expecting vast growth can support that sort of EPS; a monster like Amazon cannot.

In the case of Meta, they've had multiple bad quarters. In Q3 2022 alone, revenues declined 4% while expenses rose an astounding 19%. Their operating revenue has dropped by 46% -- extrapolating forward, unless they cut expenses, they won't be able to pay their bills within 15 months. When you see a house on fire, you put it out immediately. You don't wait until everyone inside has burned to death.
 

Puiu

Posts: 5,949   +4,993
TechSpot Elite
While definitely bad, the layoffs aren't as big as people try to make them be.

For example Microsoft employed around 40k people in 2022 (they went from 181k in 2021 to 221k in 2022). a 10k layoff is just a very small portion of what they hired in just 1 year. Google too went from 135k to 156k in 2021 (don't have 2022 numbers).
 

yeeeeman

Posts: 486   +434
Kinda expected. they hired like crazy, lots of people to stay idle and press some buttons from time to time. this equalizes things a bit.
 

BadThad

Posts: 1,272   +1,550
Salesforce recently announced that it would lay off over 7,000 employees, with CEO Marc Benioff suggesting younger remote workers might be to blame for the company's falling productivity.

I have to agree! Remote work requires a high level of expertise and experience with a company's products/services. The person doing the work must also be able to work with little supervision and have the ability to recognize the work that needs to be done so they have no "idle time" sitting around for a manager to tell them what to do. Young workers generally do not posses these qualities and companies get the work of a "silent quitter", I.e. only really working when told.
 

ferrellsl

Posts: 102   +107
I'm almost certain this is all about just "refreshing" the work force. Get rid of the lower bracket, then start anew sometime later, slowly. Their financials don't justify these layoffs in the slightest, so this might be it. And if "everyone's doing it", it'll raise much fewer eyebrows...
You're assuming that these companies are being honest when reporting their financials. Honesty is not a strong point for any of these firms.
 

Superconductor

Posts: 157   +195
I'm almost certain this is all about just "refreshing" the work force. Get rid of the lower bracket, then start anew sometime later, slowly. Their financials don't justify these layoffs in the slightest, so this might be it. And if "everyone's doing it", it'll raise much fewer eyebrows...

jettisoning the dead weight has been common in the tech industry for decades now ...
 

Mariabliss

Posts: 12   +12
I don't see anything in their severance for learning to code...
Well if you get a few months or whatever of severence pay you could get some run of the mill part time job, that plus the severence pay would drag out enough time for you to do a short course and upskill. Coding bootcamps or so they're called can be around 6 months, several of those severence pays were close to that on severence pay alone.

Stick your nose to the books immediately, get started on a new skill or refresh your current ones, give that resume a shiny new look