Tech companies are offering a range of severance packages that include several months of salary and health-care benefits.
Google is cutting 12,000 workers, becoming the latest tech company to cut back on its headcount.
The wave of massive job in the tech industry began last fall as slower revenue growth is expected as the economy contracts.
The nearly 25-year old tech giant will provide employees with 16 weeks salary, plus two weeks for every additional year at the Alphabet GOOGL subsidiary. The cuts started Jan. 20.
The severance package also includes paying for six months of health insurance, job-placement services and immigration support for those affected, plus 2022 bonuses and remaining vacation time. Google will also accelerate at least 16 weeks of GSU vesting. GSUs are certificates representing Alphabet shares.
The jobs that were eliminated were across the search and cloud company, including Alphabet, product areas, functions, levels and regions, Sundar Pichai, Google’s CEO, wrote in an email.
He said Google will provide severance packages to employees in other countries that are “in line with local practices.”
Tech companies continue to slash their workforce in an effort to cut costs as the economy slows down, offering various severance packages to its employees.
Microsoft, Amazon and Meta
While most of the tech firms appear to provide more than adequate severance packages, including salaries and health-care benefits for several months, employees at Google and Meta Platforms (META) – Get Free Report received the most generous offer of a minimum of four months of paid salary.
Amazon (AMZN) – Get Free Report was rumored to have offered three months of salary. Microsoft did not mention the length of its severance payments and said only that it would provide “above-market severance pay,” according to CEO Satya Nadella in a U.S. Securities and Exchange Commission filing.
Microsoft is also providing health-care coverage for six months, continued vesting of stock awards for six months and 60 days’ notice prior to termination, “regardless of whether such notice is legally required,” he said. “Benefits for employees outside the U.S. will align with the employment laws in each country.”
The company said it also taking a $1.2 billion charge in the fiscal second quarter related to severance costs, changes to its hardware portfolio and the cost of lease consolidation of its offices.
“These decisions are difficult, but necessary,” Nadella said. “We are committed to ensuring all those whose roles are eliminated have our full support during these transitions.”
A Tough Time For Tech
On Jan. 4 Nadella said the tech industry should be prepared for the next two years to be challenging. He said it would face more roadblocks before it recovers.
“I would say the next two years are probably going to be the most challenging, because after all, we did have, you know, a lot of acceleration during the pandemic, and there is some amount of normalization of that demand,” Nadella told CNBC.
Revenue growth has been anticipated to slow down, prompting other tech companies such as Meta Platforms to cut 11,000 jobs, a first since the social-networking giant started up in 2004. E-commerce giant Amazon said it would eliminate more than 18,000 jobs.
Meta Platforms, the owner of Facebook, Instagram, and WhatsApp, cut 13% of its staff in November.
The social media company gives its workforce the most severance by offering 16 weeks of salary, plus two additional weeks for every year of service without instituting a limit.
Meta CEO Mark Zuckerberg laid out the generous severance package offered to employees in a blog post. The company will pay all paid time off (PTO) and everyone who is part of the restricted stock units (RSU) program received their November 15 vesting.
Meta will continue to pay health insurance coverage for six months for both employees and their dependents, plus provide three months of career support with an external vendor, including “early access to unpublished job leads,” the company said.
The company is also known for hiring employees who are working in the U.S. because they have a company-sponsored visa. The tech behemoth also provided immigration specialists to provide guidance.
“I know this is especially difficult if you’re here on a visa,” Zuckerberg said. “There’s a notice period before termination and some visa grace periods, which means everyone will have time to make plans and work through their immigration status.”
Amazon’s Layoffs Continue
Amazon continued its layoffs on Jan. 18, totaling 18,000, which is the largest amount in its history.
Employees in some divisions received “voluntary severance” offers last November when the layoffs initially began, according to CNBC.
Those employees received a severance payment of three months of pay, plus one week of salary for every six months of tenure at the company, the report said.
Amazon employees also received a weekly stipend for 12 weeks that could be used toward premiums for COBRA premiums after their health insurance coverage ended December 31.
Twitter’s new CEO, Elon Musk, had said he would offer three months of salary for severance, but some employees have said they’d received only one month so far, plus two months of nonworking pay in compliance with the Worker Adjustment and Retraining Notification, or WARN, Act.
The WARN Act requires employers to provide 60 days of notice for layoffs that occur company-wide.
A judge ruled that a class action lawsuit from several employees seeking more pay must seek redress in private arbitration instead due to the the employment contract that was signed with Twitter.