layoff severance package in 2023- Are the big giants different?

A layoff severance package is a set of benefits provided to employees who are being laid off or terminated due to lack of work or budget constraints. The package is intended to provide some financial and job search support for the affected employees as they transition to new employment. What is the layoff severance package in 2023 by FAANG?

A typical layoff severance package example may include

• A lump sum payment of cash, often based on the employee’s length of service and/or level of compensation
• Continuation of specific benefits, such as health insurance, for a specified period of time
• Outplacement services, such as assistance finding a new job
• Release of legal claims against the employer, in exchange for the severance benefits

However, it’s important to note that severance packages are not legally required and can vary greatly depending on the employer’s policies and the circumstances of the employee’s separation. Also, it’s worth mentioning that some employers may not provide a severance package for layoff employees, and it’s always better to check the company policies or consult the HR department for more details. Here are the tech layoffs in 2022

Layoff severance package in 2023

Google

Google LLC is an American multinational technology company focusing on search engine technology, online advertising, cloud computing, computer software, quantum computing, e-commerce, artificial intelligence, and consumer electronics. It has been referred to as “the most powerful company in the world” and one of the world’s most valuable brands due to its market dominance, data collection, and technological advantages in the area of artificial intelligence.

Date of layoff announced: Jan 18, 2023. 

Laid-off strength: 12K Employees in 2023 (5% of Global Google’s workforce)

Reason for the layoff:  

“bound to go through difficult economic cycles” and will “re-engineer our cost base, and direct our talent and capital to our highest priorities.” 

Severance package google as CEO email:

• We’ll pay employees during the full notification period (minimum 60 days).
• We’ll also offer a severance package starting at 16 weeks’ salary plus two weeks for every additional year at Google, and accelerate at least 16 weeks of GSU vesting.
• We’ll pay 2022 bonuses and the remaining vacation time.
• We’ll be offering 6 months of healthcare, job placement services, and immigration support for those affected.
• Outside the US, we’ll support employees in line with local practices.

Full memo Pichai sent out to Google employees.

Googlers,

I have some difficult news to share. We’ve decided to reduce our workforce by approximately 12,000 roles. We’ve already sent a separate email to employees in the US who are affected. In other countries, this process will take longer due to local laws and practices.

This will mean saying goodbye to some incredibly talented people we worked hard to hire and have loved working with. I’m deeply sorry for that. The fact that these changes will impact the lives of Googlers weighs heavily on me, and I take full responsibility for the decisions that led us here.

Over the past two years we’ve seen periods of dramatic growth. To match and fuel that growth, we hired for a different economic reality than the one we face today.

I am confident about the huge opportunity in front of us thanks to the strength of our mission, the value of our products and services, and our early investments in AI. To fully capture it, we’ll need to make tough choices. So, we’ve undertaken a rigorous review across product areas and functions to ensure that our people and roles are aligned with our highest priorities as a company. The roles we’re eliminating reflect the outcome of that review. They cut across Alphabet, product areas, functions, levels and regions.

To the Googlers who are leaving us: Thank you for working so hard to help people and businesses everywhere. Your contributions have been invaluable and we are grateful for them.

While this transition won’t be easy, we’re going to support employees as they look for their next opportunity.

In the US:

• We’ll pay employees during the full notification period (minimum 60 days).
• We’ll also offer a severance package starting at 16 weeks’ salary plus two weeks for every additional year at Google, and accelerate at least 16 weeks of GSU vesting.
• We’ll pay 2022 bonuses and the remaining vacation time.
• We’ll be offering 6 months of healthcare, job placement services, and immigration support for those affected.
• Outside the US, we’ll support employees in line with local practices.

As an almost 25-year-old company, we’re bound to go through difficult economic cycles. These are important moments to sharpen our focus, reengineer our cost base, and direct our talent and capital to our highest priorities.

Being constrained in some areas allows us to bet big on others. Pivoting the company to be AI-first years ago led to groundbreaking advances across our businesses and the whole industry.

Thanks to those early investments, Google’s products are better than ever. And we’re getting ready to share some entirely new experiences for users, developers and businesses, too. We have a substantial opportunity in front of us with AI across our products and are prepared to approach it boldly and responsibly.

All this work is a continuation of the “healthy disregard for the impossible” that’s been core to our culture from the beginning. When I look around Google today, I see that same spirit and energy driving our efforts. That’s why I remain optimistic about our ability to deliver on our mission, even on our toughest days. Today is certainly one of them.

I’m sure you have many questions about how we’ll move forward. We’ll be organizing a town hall on Monday. Check your calendar for details. Until then, please take good care of yourselves as you absorb this difficult news. As part of that, if you are just starting your work day, please feel free to work from home today.

-Sundar

Amazon

Amazon.com, Inc. is an American multinational technology company focusing on e-commerce, cloud computing, online advertising, digital streaming, and artificial intelligence. It has been referred to as “one of the most influential economic and cultural forces in the world”,[5] and is one of the world’s most valuable brands.

Date of layoff announced: Jan 18, 2023,

Laid-off strength: 18K Employees in 2023 (6% of Global Amazon’s workforce)

Reason for the layoff:

“Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so. These changes will help us pursue our long-term opportunities with a stronger cost structure,” “However, I’m also optimistic that we’ll be inventive, resourceful, and scrappy in this time when we’re not hiring expansively and eliminating some roles. Companies that last a long time go through different phases. They’re not in heavy people expansion mode every year.”

Amazon severance package: 

• Offering full pay and benefits over a 60-day period, when Amazon will keep them on the payroll. After that period, Amazon will offer laid-off employees several weeks of severance depending on their length of time with the company.
• a separation payment. 
• Transitional health benefits
• Job placement.

Microsoft

Microsoft Corporation is an American multinational technology corporation producing computer software, consumer electronics, personal computers, and related services. Headquartered at the Microsoft campus in Redmond, Washington, Microsoft’s best-known software products are the Windows line of operating systems, the Microsoft Office suite, and the Internet Explorer and Edge web browsers. Its flagship hardware products are the Xbox video game consoles and the Microsoft Surface lineup of touchscreen personal computers.

Date of layoff announced:  Jan 18, 2023. 

Laid-off strength: 10K Employees in 2023 (5% of Global Microsoft’s workforce)

Reason for the layoff: 

“macroeconomic conditions and changing customer priorities”

Microsoft severance package:

• Healthcare coverage for six months
• Continued vesting of stock awards for six months
• 60 days’ notice prior to termination

Memo:

Microsoft CEO Satya Nadella says the company will be “making changes that will result in the reduction of our overall workforce by 10,000 jobs through the end of FY23 Q3.”“As we saw customers accelerate their digital spending during the pandemic, we’re now seeing them optimize their digital spend to do more with less,” “We’re also seeing organizations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one.”

Salesforce

Salesforce, Inc. is an American cloud-based software company headquartered in San Francisco, California. It provides customer relationship management (CRM) software and applications focused on sales, customer service, marketing automation, analytics, and application development.

Date of layoff announced:  Jan 4, 2023. 

Laid-off strength:  7K Employees in 2023 (10% of Global Salesforce’s workforce)

Reason for the layoff: 

“challenging economic environment.”

Salesforce severance package:

• minimum of “nearly” five months of pay
• includes six months of health-care coverage.
• a minimum of two months outplacement support.

Coinbase

Coinbase Global, Inc., branded Coinbase, is an American publicly traded company that operates a cryptocurrency exchange platform. Coinbase is a distributed company; all employees operate via remote work and the company lacks a physical headquarters. It is the largest cryptocurrency exchange in the United States by trading volume.

Date of layoff announced: Jan 10, 2023

Laid-off strength: 1K Employees in 2023 (18% of Global Coinbase’s workforce)

Reason for the layoffs:

“As we examined our 2023 scenarios, it became clear that we would need to reduce expenses to increase our chances of doing well in every scenario,” Armstrong said in the statement. “While it is always painful to part ways with our fellow colleagues, there was no way to reduce our expenses significantly enough, without considering changes to headcount.”

Coinbase severance package:

• a minimum of 14 weeks base pay (2 additional weeks per year worked),
• health insurance, and other benefits.
• ” Coinbase will also offer “extra transition support” for employees with work visas or based outside the US.

Bottom line

Tech layoffs in 2023 would remain the hot topic throughout 2023. But remember, you should focus on long-term goals i.e regular investing and regularly improving your tech and soft skills.  Here are a few tips that you can follow during your layoff. First 10 helpful tips at a personal level and second 10 sequence of steps to find a new job quickly and Third Top 10 proven ways to manage finances.[ Post 9]

Frequently Asked Questions

1. What is the severance package for Texas?

Under § 821.25(b) of the Texas Payday Law rules, severance pay is additional pay for an employee’s past work that is given at the end of the employee’s employment, and is usually, but not always, based upon a set formula such as length of prior service.

2. What is the typical severance package?

A typical severance package may include financial compensation, benefits continuation, and non-financial benefits such as outplacement services. Severance specifics vary by company and employee role, and tenure. Not mandatory in the US. It is standard to be paid for any accrued vacation time and also to be offered an additional lump sum, usually two weeks of pay for every year at the company.

3. What is the severance package in California?

Many severance packages in California use a formula such as one week’s pay for every year of service, or more generous packages might pay out a month’s pay for every year. Other California packages are based on lump-sum payments. The parties are free to use any formula or payout any amount.

4. What states require severance pay?

California, Colorado, Hawaii, Illinois, Massachusetts, Missouri, and Montana require employers to pay severance paychecks to terminated employees immediately. The remaining states vary from 24 hours to 7 days.

5. Is severance pay taxable?

Yes, severance pay is taxable in the year that you receive it. Your employer will include this amount on your Form W-2 and will withhold appropriate federal and state taxes.

6. What is a typical executive severance package OR exit package for executives? 

A severance agreement may be a lump-sum payment or a salary over a period of months. If not a lump-sum payment, the agreement may pay an executive’s salary for anywhere from a couple of months to a year or more. The specifics of the package vary depending on the company and the individual executive’s role and tenure.

7. What are c-level severance packages?

C-level severance packages refer to compensation packages offered to top-level executives, such as CEOs, CFOs, and COOs, upon their departure from a company. These packages often include a combination of financial compensation, such as salary and benefits, as well as non-financial benefits, such as outplacement services. The goal of a c-level severance package is to provide support for the executive during their transition out of the company.

8. Can I collect unemployment if I get severance pay in California?

In California, if you receive severance pay, it may affect your eligibility for unemployment benefits. The California Employment Development Department (EDD) will consider your severance pay as income and may reduce the amount of unemployment benefits you are eligible to receive. You will need to report your severance pay when you file your unemployment claim and provide documentation of the amount you received. The EDD will then determine your eligibility for benefits and the amount you will receive based on your income and the severance pay you received.

9. What is the voluntary exit severance package ?

A voluntary exit severance package, also known as a golden handshake, is a package offered to employees who choose to leave a company voluntarily. It typically includes financial compensation, such as a lump sum payment, and benefits continuation. The specifics of the package vary depending on the company and the individual employee’s role and tenure.

10. What is the employment exit package?

An employment exit package, also known as a severance package, is a compensation and benefits package offered to employees who are leaving a company, whether it’s due to termination, layoff, or voluntary departure. It typically includes financial compensation, benefits continuation, and non-financial benefits such as outplacement services. The specifics of the package vary by company and employee role and tenure.