How One Man Negotiated A $40 Million Mass Severance Bundle
9 min read
Though it’s a bummer to listen to about extra layoffs, I additionally really feel lots of hope and pleasure for many who have misplaced their jobs for 2 causes.
First, there’s the advantage of getting a severance package deal. Think about getting a severance package deal price six months of wage after which discovering a brand new job two months later for comparable pay. In the event you do, you’ll have had two months off after which get to earn double pay for 4 months!
Second, the sting of getting laid off may lastly propel people to take a leap of religion and begin their very own enterprise, return to high school, or enter a brand new discipline of labor. Compelled change could be a large blessing!
Studying to adapt to an uncomfortable scenario will solely make you stronger. Getting laid off might be among the best issues that might ever occur to you. I do know it was for me.
Patiently Ready To Inform You About The Mass Severance Bundle Negotiation Story
After sending out one in every of my weekly newsletters, I acquired an e-mail response from a reader. He talked about he was laid off from his Huge Tech Co. Nevertheless, he additionally shared a severance package deal negotiation story I had by no means heard of earlier than.
I’ve truly been sitting on this story since early 2020 to guard the reader. He agreed to let me instantly share his severance package deal negotiation story if I didn’t share the place he labored and his final identify.
Nevertheless, as somebody who negotiated my very own severance again in 2012, issues can get dicey when deferred compensation is concerned. Till all of the severance package deal cash hits your checking account, you’re nonetheless at your earlier employer’s mercy.
Even after you obtain all of your severance cash, it’s finest to remain quiet for some time. In the event you do one thing to jeopardize the fame of the agency, the agency might conceivably try to get that severance package deal a refund!
The $40 Million Mass Severance Bundle Negotiation
Right here’s the e-mail from a Monetary Samurai e-newsletter subscriber.
Hey Sam,
Thanks for the e-newsletter and severance negotiation guide. I purchased it with a plan to make use of it to engineer my layoff within the subsequent yr, however issues modified. Sadly, I used to be laid off at Huge Corp earlier than I might begin negotiating a severance.
Though this was unhealthy timing, I did use the arrogance and a few delicate methods in your guide to get an even bigger payout for Restricted Inventory Models (RSUs), which I might have missed out on by a few month.
If you wish to hear the story however promise to not use my final identify or firm, I’ll inform ya the story.
I used to be initially going to attempt negotiating getting my RSUs paid out only for myself. Ultimately, I ended up campaigning to get the RSUs paid out for the two,000 of us that have been let go!
The typical worth of the RSUs was $20,000 per individual, so this was a $40 million ask. And I acquired it for everybody. Thanks!!!
Regards,
Bob
Holy crap!
We all know the most important severance package deal ever was by the ex-founder and CEO of WeWork who walked away with about $1 billion. However that’s a particular case as a result of the man was the founder and was in a position to reap the benefits of SoftBank’s foolish cash.
Till Bob’s e-mail, I had by no means heard of or thought in regards to the technique of negotiating a greater severance package deal for different colleagues as effectively.
Subsequently, I requested Bob to elaborate how this $40 million severance negotiation occurred. Right here’s his clarification.
How One Man Negotiated A $40 Million Severance Bundle For two,000 Colleagues
I labored at Huge Corp for the final six years doing software program. I used to be solely staying for the cash and advantages till my daughter was in faculty.
A brand new VP was employed to go all of software program. As is often the case with a brand new Kahuna, heads have been going to roll. My group’s boss and different bosses out of the blue began ‘retiring’ with out warning. They every gave 1-week notices.
In large company gamesmanship, this actually meant {that a} new larger fish had are available, fires those that aren’t behind his new technique, and places in his personal folks from earlier firms.
I knew the writing was on the wall. I started scheming my very own exit for a while when Huge Corp introduced that our complete group and others can be minimize – about 2000 folks.
Blasted! They beat me to it!
New CEO, New Imaginative and prescient
Now on the similar time this was taking place, we had a brand new CEO who was very clear. He needed to get the tradition aligned with him. We even had a giant HR marketing campaign about reality and transparency within the office.
The brand new CEO had all-hands conferences with all the staff however failed to say these layoffs in any respect. One other subtext is that Huge Corp is old-fashioned and has a very fear-based tradition. Everybody thinks they may get minimize on a regular basis. It’s actually a weird and unusual place.
Like I stated earlier, I remained at my job for the cash – banking and saving 65% of my take-home pay.
So Huge Corp finally introduced that we’d all be laid off and pay a good severance. We even had a number of weeks’ discover with the intention to try to discover one other inside job earlier than our precise final day. That actually by no means occurs. It’s only a widespread courtesy gesture to decrease blowback.
The Quest To Get Staff Their Restricted Inventory Models
All the pieces about my severance was acceptable, besides that my final day was 4 weeks earlier than our subsequent spherical of RSUs vested. This may suck as a result of it was appreciable – about $24,000 to me.
Plus the previous few years Huge Corp had begun to present extra RSUs as a substitute of money raises – so this was deferred wage in a method.
I requested HR in regards to the RSUs and advised them properly that it wasn’t truthful. As anticipated they stated, “powerful shit, unhealthy timing” in essence. Hmmmmmm. Nicely, that does suck.
Negotiating A Severance Straight With The CEO
So with the methods out of your guide and the arrogance that it gave me, I made a decision to pitch my thought on to the CEO. On the finish of the day, he was the one one who might make the decision.
I wrote the CEO an electronic mail telling him that the layoff timing was horrible and that we deserved these RSUs for these causes:
1) We have been just some weeks away from getting them. Is that this who ‘we’ are as an organization? (angle = not truthful)
2) Many people got these as a substitute for larger deserved raises in the previous few years. (angle = this was our cash already)
3) The corporate has simply had the perfect monetary yr and quarter within the firm’s historical past. Those being laid-off helped us ALL get there. (angle = we’re getting laid off however helped you get a large bonus as CEO)
Then I advised the CEO that I used to be sending the message on to him as a result of he might get the job performed and that I appreciated the tradition of reality and transparency – and ended it with “In Solidarity.” Heh 😀
All these items have been meant to be arguments that you may’t actually argue with as not true. To counteract my factors, all he’d should do was say ’powerful shit dude’.
Power In Numbers By Organizing
Anyway, I despatched him the e-mail and I heard nothing again for 2 weeks. Then I started to gather a listing of all laid-off workers and wrote them an electronic mail making an attempt to get all of us to signal a marketing campaign to present us the RSUs. Strategically, I didn’t ship out the e-mail as a result of I knew they have been watching me. I simply needed to have them observe my intent.
My grasp plan was to have all 2,000 workers electronic mail the CEO and head of HR on the similar time. I actually simply needed them to sweat.
Then out of the blue, we acquired an electronic mail from HR saying that as a one-time change to coverage, we’d be given the money equal of our 2020 RSUs upon leaving.
This was stunning to me since with 2000 workers and a median of $20,000 RSUs every, this was a $40 million marketing campaign that labored!
The Change Of Coronary heart
So I by no means acquired a response from the CEO, however I wrote him an electronic mail thanking him for the RSUs. He lastly did reply and stated that I used to be welcome and thanked me for the earlier electronic mail.
I spoke with HR earlier than leaving and requested them in regards to the change of coronary heart and all they stated was that it got here from the very high. Uh huh. Yeah OK.
The timing was additionally vital. We have been advised we have been getting laid off two weeks earlier than the COVID-19 shutdown. I’m certain that had I waited even two weeks to marketing campaign for our RSUs, the reply would have been, completely no friggin’ method.
The marketing campaign labored and the general public who benefited by no means even knew what I did to assist them out. Good karma I hope!
A Lesson In Asking For What You Deserve
Bob’s story about negotiating a mass severance package deal is unimaginable. It exhibits him:
- Being strategic and resourceful by studying How To Engineer Your Layoff. You will discover something you need on the web in case you look. Use the code “saveten” to save lots of $10.
- Having the braveness to ask for what he thinks he deserves. He might have simply simply accepted his severance package deal, just like the overwhelming majority of individuals do.
- Demonstrating sufficient emotional intelligence to correspond with HR and the CEO in a respectful method. It’s straightforward to go on the offensive and get emotionally charged once you really feel disrespected.
- Skillfully crafting an unassailable argument if proven to the general public. Bob knew from studying Monetary Samurai, one of many the reason why negotiating a severance is feasible is because of absolute reputational destruction.
- Understanding the ability of group and the power in numbers. He knew he might get lots of different folks on his facet.
Studying how you can negotiate effectively is without doubt one of the most vital abilities in life. A negotiation is concerned in every thing vital – from getting a promotion to getting your children to go to mattress in an affordable method.
Be taught to empathize with different folks by understanding the place they’re coming from. Empathy includes making folks really feel heard, seen, understood, and beloved. In the event you do, you’ll get a lot farther than you ever thought potential!
Reader Questions And Options
Have you ever heard of 1 individual negotiating a mass severance package deal earlier than? In the event you’ve been lately laid off, what was the expertise like? How large of a severance package deal did you get?
For extra nuanced private finance content material, be part of 55,000+ others and join the free Monetary Samurai e-newsletter and posts through e-mail. Monetary Samurai is without doubt one of the largest independently-owned private finance websites that began in 2009.
