Episode 88: Layoffs and Severance -- What Should You Know?
February 27th, 2023
26 mins 32 secs
About this Episode
We talk about a topic that has come up extensively over the last few months -- severance packages. What are they? What aren't they? Why do they exist? What do you do when you get them? Our goal is to answer all of the questions we get around them to help you learn and be prepared if you’re faced with them.
Question 1: What is a severance package and what is the point of them especially if I’m an at will employee?
- "At Will" means that you don’t belong to the company.
- Why do companies give severance? To absolve blame and because it’s the right thing to do to get the person to their next job since looking may be unexpected.
- It is an agreement to keep quiet about fault, i.e., it’s money to say that this was a no-fault situation.
- It can have a combination of compensation and benefits, talks about your last day, and what needs to be done to earn it (like return your stuff or finish a project).
- Note that there is a timeline around signing it (45 days for over 40 if more than 1 person, different rules if WARN is enacted). Take your time to understand your package.
- Please know that people delivering the news are having a horrible day too.
Question 2: Can I negotiate a severance package?
- Not really, unless you have very clear evidence that the company has done something wrong by you.
- It is usually determined by a formula.
- One exception is if you have a pending legal action or a documented legal case, or if you are an executive who has negotiated a separation ahead of time.
- Potentially yes, for sales commissions that close by a certain date.
- Don’t compare yours with the ones from other companies -- they’re all different and have different terms of their packages.
Question 3: What can I expect once I hear I’m part of a RIF (Reduction in Force)?
- What the package is -- what it includes and what it doesn’t.
- Get a lot of paperwork (15-50 pages+) with all of the terms of the agreements.
- Last day and when and how to return your stuff.
- Expectations around what it takes to get severance and when you have to sign (don’t wait until the last day- it’s just annoying).
- COBRA information, which helps you stay on your benefit plan for 18 months after you leave the company.
Question 4: Should I sue/get a lawyer?
- Not unless you have documentation that proves you’ve been harassed, etc.
- Have someone to review the paperwork.
- Know that a lawyer put your package together so it’s probably pretty sound.
Question 5: Thoughts on posting my RIF on Linkedin/social media?
- You do you
- Being supportive to those affected is lovely, but you’re not RIFed, send direct messages and be supportive of people, but ndon't do a “I’m sad my colleagues are gone” posts. Share their profile, write a recommendation, and make the help about them, not you.
- Green circle on LinkedIn -- yes or no? YES! It makes you more searchable!
- Say what you want and leave your feelings to your inner circle. On Linkedin and social be positive and looking towards the future.
- Personal reach outs are better than big dramatic posts
- When you share desperation, people feel badly and helpless. Keeping it professional in professional groups and on Linkedin will help people know if and how they can help find the next job, but saying that if you don’t get a job soon you won’t be able to pay your mortgage makes people feel guilty and doesn’t work in your favor in professional circles.
To wrap it up, being a part of a RIF is hard, scary, and heavy on the heart. To be prepared, listen to our Looking for a Job Learning Track episodes found on the resources page of our website. We recommend always having a current resume and Linkedin, and keeping your skills up-to-date in case you find yourself in an unexpected job search.