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Does severance package get reduced in subsequent rounds of layoffs?

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Anonymous User at Taro Communitya year ago

All Big Tech including Google, Meta, Amazon have done one round of layoffs. Interesting to hear what is your opinion is on the severance packages in the subsequent rounds. Does it get reduced? Asking because I am in interview process with Google. If they do a layoff will I get very less severance than the 1st round? My friends at Google are certain that there will be more rounds of layoffs in coming months.



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    Robinhood, Meta, Course Hero, PayPal
    a year ago

    This is the kind of niche information that I can't really find anything on Google for. :/

    I imagine the layoff package will remain around the same, especially with these large profitable companies that have mountains of cash and are able to foot the bill. Here's why:

    • Brand is important - Having an ultra-competitive layoff package maintains image and minimizes the damage to ability to attract talent.
    • Minimize pushback - If future packages are substantially worse, a lot of the more recent laid off folks will complain and potentially pursue legal action.
    • Keeps the door open - Of course, an employee won't be happy after getting laid-off, but if you want a chance of potentially hiring back that person, a strong severance package is the first step. This is especially true for FAANG companies that are so good at hiring great people - Reclaiming the talent they lost once economic conditions improve is a solid option.

    Again, this is entirely guesswork, so take it with a grain of salt. If anybody has more information and experience with this, please correct me!

    For what it's worth, I looked up Coinbase's layoffs (Coinbase is a company I consider at the level of FAANG), and it seems like the packages were comparable for the 2 layoffs they did in the past year. Robinhood, a similar company, did the same.

    Lastly, I recommend these resources:

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    Tech Lead/Manager at Meta, Pinterest, Kosei
    a year ago

    The company would like to keep the severance packages the same, but, unfortunately, it frequently goes down.

    A very common failure mode for startups (and larger companies to a lesser extent) is that they don't cut deep enough when making layoffs. What typically happens:

    • The company lays of 10% of the staff, optimistically hoping that the economy/company growth will turn around soon.
    • A few months later, it becomes clear that more cuts need to be done. The company decides to let go of another 10% of the staff.

    Since multiple layoffs within a company is horrible for morale, the subsequent round of layoffs indicates that the company is in a dire economic condition. With few options remaining, these companies will cutback on severance as an additional cost-saving measure.

    However, larger companies like the ones you mentioned will generally be more employee-friendly here. All these companies have very healthy balance sheets, so 10s of millions of dollars here or there don't matter all that much