What Severance Packages Do Google, Microsoft, Amazon and Other Tech Giants Offer to Laid-Off Employees?

The tech industry has been forced to let go of a large number of employees in recent months due to a decrease in investor confidence and a rise in borrowing costs. Those who have been laid off are now facing an uncertain job market, with job cuts occurring at all levels and in all departments. Very few companies, if any, have been able to avoid this, with Apple being the only possible exception.

The size and length of severance packages for laid-off workers will depend on the company they work for. Some of the most well-known tech companies have made promises to their employees regarding the severance packages they will receive.

On Friday, Google's CEO Sundar Pichai announced that the company would be letting go of 12,000 employees from various departments, locations, and levels. U.S. employees who are laid off will be given their pay until the notification period ends, and will also receive a 16-week severance package, with an extra two weeks for each year they worked at Google.

Pichai stated in a memo to staff that those who have been laid off would have their share vesting accelerated for a minimum of 16 weeks. Additionally, they will be provided with 6 months of healthcare coverage.

An official document from Alphabet, the parent company of Google, was released by the Securities and Exchange Commission, which included a memo from Pichai. However, the filing did not include the financial details of the job cuts.

According to CNBC, employees had been feeling anxious about potential layoffs, and during a tense all-hands meeting in September 2022, they voiced their opposition to Google CEO Sundar Pichai's cost-cutting initiatives.

Microsoft announced on Wednesday that it would be reducing its workforce by 10,000 employees in anticipation of a decrease in revenue for the upcoming year. The layoffs will be completed by the end of March, with a spokesperson from the company informing CNBC that sales and marketing teams will experience a greater impact than engineering.

Satya Nadella, the Chief Executive Officer, announced in a memo to employees that some of them would find out this week if they were being laid off.

U.S. employees who are eligible for benefits will be given severance, six months of healthcare coverage, stock vesting, and 60 days of notice, according to a statement from Microsoft CEO Satya Nadella. Nadella had previously hinted at potential cost-cutting measures in an interview with CNBC-TV18.

Nadella emphasized the importance of ensuring that our expenses are in line with our revenue growth in order to remain operationally focused.

Microsoft has announced that it will be taking a $1.2 billion hit due to its restructuring and job-cutting initiatives.

Since the start of last year, Amazon has been carrying out a series of layoffs. In November, the majority of the job losses were in the recruiting and devices and services departments. At the time, the company provided those affected with a severance package that included a financial payment, health benefits, and job placement assistance.

This week, the company began its most recent round of job cuts, with the most significant reductions occurring in the retail and human resources departments.

Amazon is providing full pay and benefits to retail employees in the U.S. for a period of 60 days, during which they will remain on the payroll but will not be required to work. After that, Amazon will offer those who have been laid off severance for a number of weeks based on their tenure with the company, a separation payment, health benefits for the transition period, and job placement assistance.

Beth Galetti, the head of Human Resources at Amazon, has stated that the company will be providing a severance package to employees affected by the changes. This package includes a separation payment, health benefits as applicable by country, and job placement assistance.

The details of Amazon's severance package are unknown, particularly if it includes any provisions that would enable employees to speed up the vesting of stock compensation. This is of great importance to Amazon personnel, as the company's remuneration has traditionally been heavily reliant on stock. A representative from Amazon was not immediately available to answer a query for comment.

On January 4th, Marc Benioff, the CEO of Salesforce, informed his employees that the company would be reducing its workforce by 10%, or more than 7,000 people, due to the current economic climate. Those laid off would receive a minimum of nearly five months of pay, as well as health insurance benefits and career resources for an unspecified amount of time.

On the same day, some workers who were let go were informed of their termination.

Benioff stated that people outside the United States will receive the same level of assistance. The company predicted that it would incur an impairment of up to $1.4 billion due to severance payments and other employee transition costs, as stated in an 8-K filing.

Just days after announcing layoffs in January, Benioff warned employees that further job cuts could be on the horizon.

On November 9th, Mark Zuckerberg, the CEO of Meta, declared that the company would be cutting 11,000 jobs in order to become more streamlined and efficient. This announcement came after months of declining stock prices and investors voicing their disapproval of Zuckerberg's costly move towards virtual reality.

At the time of the layoffs, Mark Zuckerberg promised each affected employee 16 weeks of severance pay, plus an additional two weeks for each year of service. He also offered vesting of Restricted Stock Units and health insurance coverage for a set period of time.

In December 2022, some individuals who had been laid off from a non-traditional apprenticeship program informed CNBC that the severance packages they were given were not up to par with those of other recently laid off employees. Instead of the 16 weeks of base pay that had been promised by Zuckerberg, they only received 8 weeks, as well as other discrepancies.

Shortly after Elon Musk's takeover of Twitter in 2022, layoffs began. It was estimated that over 3,700 employees, or more than half of the staff, would be let go. After Musk declared that Twitter staff would have to adhere to a "hardcore" work atmosphere, many more people chose to resign.

In accordance with Musk's buyout agreement, the existing severance packages were to be respected by the new management. However, a group of Twitter employees took legal action in November, shortly after the layoffs were carried out, claiming that Twitter had laid them off in breach of California's layoff notification law.

Previously, Elon Musk had stated that those who were laid off would receive three months of severance pay. However, some Twitter employees have reported that in exchange for a non-disparagement agreement and a legal waiver, they were only offered one month of severance.

Shortly after the class action was filed, new allegations were made that Twitter was only providing some of its laid-off employees with half of the compensation they had been promised.

According to a report from CNBC, Twitter let go of more than 4,000 contract employees without warning.