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Will you get paid severance if your company lays you off today? Would you care?
You've probably noticed a wave of high-profile layoffs including tech companies (if you haven't, take a look at https://bit.ly/3MSrKTc).
If your company were to announce layoffs today and you were one of the people affected, do you have an agreed severance package that'll kick in? Would you want one? Or is it (severance) something you're not bothered too much about (e.g. 'cause you're well and maybe have quite a bit in savings)?
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Background: My startup (http://severance.co) is working on a financial product that lets companies provide a severance package for every single employee WHILE also saving them money on unemployment insurance payments, and some of the things we're wondering are how commonplace severance is with tech roles and whether high-earning tech workers care enough to negotiate severance.
- danuker 5y agoI work as a self-employed part-time consultant. There is no severance, nor do I care for one. I took my finances into my own hands, and as a result I am financially comfortable. I see severance as a gimmick in some cases, or as a way of kicking a company when it's down in other cases (maybe if it's a small one). I see insurance as a gimmick also. Have an adequate emergency fund, and it acts as an everything-insurance, similar to pooling various insurance types together.
- jleyank 5y agoUnless you're pile is in the millions, there's no way you can handle potential US health care costs w/o insurance. The catastrophic costs might damn near be infinite. Unless you have one hell of a DNR clause for your heirs. For example, 3 weeks in a small-hospital ICU in PA in 2009 was 450K. We've had a little inflation since then, and all that this paid for was keeping the patient alive. No surgery, etc.
- danuker 5y agoWow. I live in Romania, and the hospital bills are much smaller, if not state-paid. Health contributions (mandatory) are 10% of income.
- gdfgjhs 5y ago> WHILE also saving them money on unemployment insurance payments In Texas, severance package has no impact on unemployment payments. I was laid off once with 3 months of severance pay and also got full unemployment payments. In my current tech company, there have been many layoffs, they all usually got 2-6 months of severance.
- codingdave 5y agoIt may help to clarify the purpose of severance. Severance is typically not just a gift given to you to ease the pain of being laid off. It is a business transaction where they agree to pay you $X in exchange for various agreements after you have left: non-disclosure, non-disparagement, non-compete, etc. This often will tie you to behaviors that require you to play nicely with someone who let you go. So when you think about whether you want severance, the question is not whether you need the money - it is whether the money they are offering is worth it to play nicely with them and with their reputation after you have left. And in that context, yes, I personally love severance. There is rarely much more than fleeting satisfaction from ranting about being wronged by a company, so to me severance is getting paid to take some time to just get over it, move on, and not let a former employer take up any more space in my head than necessary.
- m3Lith 5y agoIn my country (Lithuania, EU), the severance is governed by law, I think the minimal value is 1 month's pay, and the minimum scales with the years you have worked. From my past workplace, all of us were laid off last year. Severances ranged from 1 to 4 months I believe, nobody complained. But I'd say the situation is that you don't think about it, as even in the worst case, finding a new place is easy, so it feels more like a unexpected "bonus". But some companies might try to talk you into making "deals" where you sign a document saying you quit voluntarily. These are usually done with social pressure and don't provide any benefits.