Why do companies pay severance?
Also don’t mean to be a douche and empathize with anyone affected. BUT it’s literally not compulsory : https://www.wrongfulterminationlaws.com/resources/wrongful-termination-law/layoffs/california-nokia-layoff.htm So why even give up so much money? People will anyway line up to work for tech companies. TC : 280 YOE : 7
Nolo
To get you to waive your legal right to sue
If a layoff happens, what could someone possibly sue the company for? If they were running a business would it be fair to get sued if they are unable to pay their employees? 🧐
Have you heard of wrongful termination?
if a tech company making big bucks doesn't give severance people would absolutely blacklist it, Amazon is getting shat on for limiting severance based on tenure, 0 severance would make you a joke it's the same thing with tech salary, it's not that workers asked nicely for it, it's what the market demanded
Sure people may crap on them but people still line up to work at Amazon. And at the end Amazon comes out ahead right?
Amazon already has a shitty image and it's struggling to attract and rerain talent in many regions. if im working here and see they're not giving severance that is one more reason to start looking elsewhere
Good media play
First it typically allows them to get around the WARN act. Additionally you are typically signing an agreement not to sue or disparage which is something of value - especially for workers in various protected categories.
Got it that makes sense. Know I know why.
Those severance agreements are wild, but the standard 2 months is to avoid filing a WARN notice 60 days before a layoff. The company is also buying stock price stability, as those notices can affect the company’s stock price.
Because you eventually want to hire people again and not alienate customers. Having the layoff equivalent of “lol get fucked” will make retaining customers and finding new employees very difficult.
If every company follows this then people will have to deal with it right? So your argument won’t hold true in that case right?
You’re making a very big assumption. Competitors will not follow along just so they win in the court of public opinion. Saving a bit of severance but skipping out on stealing business and better employees from your competition is the definition being of penny wise and dollar foolish.
Because the people on the inside can do the most damage.
To keep you from being pissed off. Pissed off people tell others, do destructive things, don’t buy that company’s products in the future, etc. Severance is normally a drop in the bucket, and it makes the layoff conversation much easier to have. Plus it’s generally the right thing to do and most companies that offer severance care about treating their former employees well because one day you’ll be hiring again, and strong candidates research how companies treat their employees (especially in hard times).
Ok and what if someone is pissed off?
I got severance and I’m still pissed off