Google nixes paying out remainder of maternity and medical leave for laid-off employees
A man walks through Google offices on January 25, 2023 in New York City.
Leonardo Munoz | Corbis News | Getty Images
Google is indicating to ex-staffers, who got laid off while on maternity and medical leave, that they won’t get paid for all of their remaining time off, according to former employees and written correspondence shared with CNBC.
More than 100 former workers have organized a group they call “Laid off on Leave.” They’re asking executives to pay them for the weeks and months they were approved to take off before the job cuts were announced in January. Those who spoke with CNBC said they’ve been told they’ll only receive pay through their designated end date, along with standard severance.
The group of former employees sent a letter to executives, including CEO Sundar Pichai and Chief People Officer Fiona Cicconi, on three separate occasions, most recently on March 9, without receiving a response. The group includes people who were approved for or are currently on maternity leave, baby bonding leave, caregiver’s leave, medical leave and personal leave.
Early last year, Google announced it would be increasing parental leave for full-time employees to 18 weeks for all parents and 24 weeks for birth parents. Cicconi said at the time that the company wanted to offer “extraordinary benefits” so employees could “spend more time with their new baby, look after a sick loved one or take care of their own wellbeing.”
But Google parent Alphabet has since entered its most severe era of cost cuts in its almost two decades on the public market. The company said in January that it was eliminating 12,000 jobs, representing about 6% of its workforce, to reckon with slowing sales growth following an extended period of expansion in the tech sector.
Pichai said U.S.-based employees would receive 16 weeks of severance pay plus two weeks for each additional year they worked at Google. The company also said it would include paid time off in the severance.
Those who were laid off while on medical leave are urging Pichai and other leaders to provide immediate clarity on the matter because of an upcoming deadline: official severance terms are expected to arrive as soon as March 31.
The Laid off on Leave group sent its first email to executives in January, and shared specific examples of Google employees impacted by the job cuts while on their previously approved leave.
One woman said she was laid off a week after her maternity leave was approved. Another said she received notice while on maternity leave, a week before she was due to give birth.
Some discussed the matter publicly.
“Exactly a week after receiving the text and sharing the exciting news that my maternity leave was approved, I got the already widely talked-about email letting me know that I was among the 12k terminated,” a Google program manager wrote on LinkedIn. “Easy target? Maybe.”
Another longtime employee, Kate Howells, posted that she gave birth just before receiving notice.
“On 1/20/23 at 7:05 am while in the hospital bed holding my hours-old newborn I learned that I was part of the #thegolden12K of Googlers who had been laid off,” Howells wrote. “I was a Googler for 9.5 years.”
A Google spokesperson told CNBC in an email that departing employees are eligible for stock and salary for their “60+ day notice period” and reiterated Pichai’s memo regarding 16 weeks of pay and an additional two weeks for every year of service.
The company didn’t address whether it would cover full medical leave on top of the severance payout.
“As we shared with impacted employees, we benchmarked this package to ensure the care we’re providing compares favorably with other companies, including for Googlers on leave,” the spokesperson said.
‘Good faith effort’
Multiple people whose jobs were terminated told CNBC their access to doctors and specialists through Google’s on-site One Medical facility was also cut off the day of the layoff notification. That disrupted treatment that was ongoing at the time, they said. A laid-off senior software engineer said he lost in-person access to his primary care doctor of three years.
Some ex-employees said they were given the option to continue seeing their doctors virtually but were otherwise advised to find replacements.
The group of laid-off workers highlighted the fact that this is taking place during Women’s History Month.
“Google is currently showcasing its workplace commitments and its participation in Women’s History Month through various products and services campaigns,” the group wrote in an email sent to Google executives. “We agree with you: it’s very important to recognize the hardships that still disproportionately affect women inside the workplace.”
Google CEO Sundar Pichai speaks at a panel at the CEO Summit of the Americas hosted by the U.S. Chamber of Commerce on June 09, 2022 in Los Angeles, California.
Anna Moneymaker | Getty Images
They said the company still has the opportunity to fix the problem.
“We respectfully request a good faith effort to honor the terms of our original parental and/or disability leave arrangements for all leaves that were approved as of January 20, 2023,” the group wrote.
At an informal event held by Google alumni group Xoogler in January, more than 50 laid-off workers gathered for mutual comfort and to seek answers. Kushagra Shrivastava, one of the organizers, recalled to CNBC the story of a mother who spoke up at the event to say she “was laid off while trying to care for a three-month old, and that was pretty tough to hear.”
It’s not just new mothers and those who are expecting soon who find themselves in a bind. The email to management also mentions the challenges faced by pregnant women who hadn’t yet formally requested a leave of absence and as a result, “will have an even longer road to securing new roles given the points they’re at in their pregnancies.”
At a new employer, those women would have to wait a year for the benefits from the Family and Medical Leave Act to kick in, “rendering it impossible for expectant and new mothers to leverage the FMLA they paid for to the detriment of their health and their baby’s wellbeing,” the group said. “Parental and medical leaves present an extraordinary burden on laid off Googlers’ ability to seek immediate new employment.”
The group’s letter pointed to companies like Amazon, which have said they would pay out the remainder of leave time in addition to severance packages.
Employees who tried to communicate with Google about the matter said they’d lost access to the internal system and could only fill out a form on a separate short-term portal. Some said they received responses a week after their inquiry, and each said they got what appeared to be an automated response, reiterating their employment end date or directing them to reapply for another position.
In an email to CNBC, the group of laid-off workers said Pichai was showing much greater concern for the company’s effort to keep apace in the battle for artificial intelligence supremacy than it was for taking care of longtime staffers who were in need of help.
“When Google CEO Sundar Pichai announced layoffs, he mentioned the company’s commitment to AI three times, but never once mentioned Google’s commitment to accessibility,” the group wrote. “This matters deeply because accessibility is part of the company’s actual mission. This clearly calls for a re-centering of priorities. It’s unsurprising that through a bungled demo just days after laying us off, Google showed they’re indeed not leading the way in AI. However, the good news is that an incredible opportunity remains to be an accessibility leader in the treatment of laid off workers.”
Quality time with baby
The group also reminded Google leadership about the significance of parental benefits and the company’s intention when it updated its plan. In particular, it said parents should have quality time their newborns without the stress of having to think about work and rush back to the office.
“Google formed their parental benefits with this in mind, emphasizing the need for parents to have time off to recover and bond with their new babies,” the email to execs said.
Some said they’re hopeful this issue is just an oversight and executives will take corrective action because the company promised them a certain amount of fully paid time off.
“Granting a payout of full remaining leave days for scheduled and upcoming leaves would be notably in line with Google’s current policy of payment for accumulated employee vacation time (PTO) in this round of layoffs,” the letter said.
The group referenced Google’s original core value, “Don’t be evil,” in asking for leadership to respond promptly.
“We invite the C-Suite to iterate with us like Googlers do,” the laid-off workers wrote to CNBC. “To come up with something more accessible and in line with the Diversity, Equity, and Inclusion workplace commitments the company touts.”
WATCH: Clockwise Capital’s James Cakmak on Alphabet lay offs
Alex Karp, CEO of Palantir Technologies speaks during the Digital X event on September 07, 2021 in Cologne, Germany.
Andreas Rentz | Getty Images
Palantir shares continued their torrid run on Friday, soaring as much as 9% to a record, after the developer of software for the military announced plans to transfer its listing to the Nasdaq from the New York Stock Exchange.
The stock jumped past $64.50 in afternoon trading, lifting the company’s market cap to $147 billion. The shares are now up more than 50% since Palantir’s better-than-expected earnings report last week and have almost quadrupled in value this year.
Palantir said late Thursday that it expects to begin trading on the Nasdaq on Nov. 26, under its existing ticker symbol “PLTR.” While changing listing sites does nothing to alter a company’s fundamentals, board member Alexander Moore, a partner at venture firm 8VC, suggested in a post on X that the move could be a win for retail investors because “it will force” billions of dollars in purchases by exchange-traded funds.
“Everything we do is to reward and support our retail diamondhands following,” Moore wrote, referring to a term popularized in the crypto community for long-term believers.
Moore appears to have subsequently deleted his X account. His firm, 8VC, didn’t immediately respond to a request for comment.
Last Monday after market close, Palantir reported third-quarter earnings and revenue that topped estimates and issued a fourth-quarter forecast that was also ahead of Wall Street’s expectations. CEO Alex Karp wrote in the earnings release that the company “absolutely eviscerated this quarter,” driven by demand for artificial intelligence technologies.
U.S. government revenue increased 40% from a year earlier to $320 million, while U.S. commercial revenue rose 54% to $179 million. On the earnings call, the company highlighted a five-year contract to expand its Maven technology across the U.S. military. Palantir established Maven in 2017 to provide AI tools to the Department of Defense.
The post-earnings rally coincides with the period following last week’s presidential election. Palantir is seen as a potential beneficiary given the company’s ties to the Trump camp. Co-founder and Chairman Peter Thiel was a major booster of Donald Trump’s first victorious campaign, though he had a public falling out with Trump in the ensuing years.
When asked in June about his position on the 2024 election, Thiel said, “If you hold a gun to my head I’ll vote for Trump.”
Thiel’s Palantir holdings have increased in value by about $3.2 billion since the earnings report and $2 billion since the election.
In September, S&P Global announced Palantir would join the S&P 500 stock index.
Analysts at Argus Research say the rally has pushed the stock too high given the current financials and growth projections. The analysts still have a long-term buy rating on the stock and said in a report last week that the company had a “stellar” quarter, but they downgraded their 12-month recommendation to a hold.
The stock “may be getting ahead of what the company fundamentals can support,” the analysts wrote.
Charles Liang, chief executive officer of Super Micro Computer Inc., during the Computex conference in Taipei, Taiwan, on Wednesday, June 5, 2024. The trade show runs through June 7.
Annabelle Chih | Bloomberg | Getty Images
Super Micro Computer could be headed down a path to getting kicked off the Nasdaq as soon as Monday.
That’s the potential fate for the server company if it fails to file a viable plan for becoming compliant with Nasdaq regulations. Super Micro is late in filing its 2024 year-end report with the SEC, and has yet to replace its accounting firm. Many investors were expecting clarity from Super Micro when the company reported preliminary quarterly results last week. But they didn’t get it.
The primary component of that plan is how and when Super Micro will file its 2024 year-end report with the Securities and Exchange Commission, and why it was late. That report is something many expected would be filed alongside the company’s June fourth-quarter earnings but was not.
The Nasdaq delisting process represents a crossroads for Super Micro, which has been one of the primary beneficiaries of the artificial intelligence boom due to its longstanding relationship with Nvidia and surging demand for the chipmaker’s graphics processing units.
The one-time AI darling is reeling after a stretch of bad news. After Super Micro failed to file its annual report over the summer, activist short seller Hindenburg Research targeted the company in August, alleging accounting fraud and export control issues. The company’s auditor, Ernst & Young, stepped down in October, and Super Micro said last week that it was still trying to find a new one.
The stock is getting hammered. After the shares soared more than 14-fold from the end of 2022 to their peak in March of this year, they’ve since plummeted by 85%. Super Micro’s stock is now equal to where it was trading in May 2022, after falling another 11% on Thursday.
Getting delisted from the Nasdaq could be next if Super Micro doesn’t file a compliance plan by the Monday deadline or if the exchange rejects the company’s submission. Super Micro could also get an extension from the Nasdaq, giving it months to come into compliance. The company said Thursday that it would provide a plan to the Nasdaq in time.
A spokesperson told CNBC the company “intends to take all necessary steps to achieve compliance with the Nasdaq continued listing requirements as soon as possible.”
While the delisting issue mainly affects the stock, it could also hurt Super Micro’s reputation and standing with its customers, who may prefer to simply avoid the drama and buy AI servers from rivals such as Dell or HPE.
“Given that Super Micro’s accounting concerns have become more acute since Super Micro’s quarter ended, its weakness could ultimately benefit Dell more in the coming quarter,” Bernstein analyst Toni Sacconaghi wrote in a note this week.
A representative for the Nasdaq said the exchange doesn’t comment on the delisting process for individual companies, but the rules suggest the process could take about a year before a final decision.
A plan of compliance
The Nasdaq warned Super Micro on Sept. 17 that it was at risk of being delisted. That gave the company 60 days to submit a plan of compliance to the exchange, and because the deadline falls on a Sunday, the effective date for the submission is Monday.
If Super Micro’s plan is acceptable to Nasdaq staff, the company is eligible for an extension of up to 180 days to file its year-end report. The Nasdaq wants to see if Super Micro’s board of directors has investigated the company’s accounting problem, what the exact reason for the late filing was and a timeline of actions taken by the board.
The Nasdaq says it looks at several factors when evaluating a plan of compliance, including the reasons for the late filing, upcoming corporate events, the overall financial status of the company and the likelihood of a company filing an audited report within 180 days. The review can also look at information provided by outside auditors, the SEC or other regulators.
Last week, Super Micro said it was doing everything it could to remain listed on the Nasdaq, and said a special committee of its board had investigated and found no wrongdoing. Super Micro CEO Charles Liang said the company would receive the board committee’s report as soon as last week. A company spokesperson didn’t respond when asked by CNBC if that report had been received.
If the Nasdaq rejects Super Micro’s compliance plan, the company can request a hearing from the exchange’s Hearings Panel to review the decision. Super Micro won’t be immediately kicked off the exchange – the hearing panel request starts a 15-day stay for delisting, and the panel can decide to extend the deadline for up to 180 days.
If the panel rejects that request or if Super Micro gets an extension and fails to file the updated financials, the company can still appeal the decision to another Nasdaq body called the Listing Council, which can grant an exception.
Ultimately, the Nasdaq says the extensions have a limit: 360 days from when the company’s first late filing was due.
A poor track record
There’s one factor at play that could hurt Super Micro’s chances of an extension. The exchange considers whether the company has any history of being out of compliance with SEC regulations.
Between 2015 and 2017, Super Micro misstated financials and published key filings late, according to the SEC. It was delisted from the Nasdaq in 2017 and was relisted two years later.
Super Micro “might have a more difficult time obtaining extensions as the Nasdaq’s literature indicates it will in part ‘consider the company’s specific circumstances, including the company’s past compliance history’ when determining whether an extension is warranted,” Wedbush analyst Matt Bryson wrote in a note earlier this month. He has a neutral rating on the stock.
History also reveals just how long the delisting process can take.
Charles Liang, chief executive officer of Super Micro Computer Inc., right, and Jensen Huang, co-founder and chief executive officer of Nvidia Corp., during the Computex conference in Taipei, Taiwan, on Wednesday, June 5, 2024.
Annabelle Chih | Bloomberg | Getty Images
Super Micro missed an annual report filing deadline in June 2017, got an extension to December and finally got a hearing in May 2018, which gave it another extension to August of that year. It was only when it missed that deadline that the stock was delisted.
In the short term, the bigger worry for Super Micro is whether customers and suppliers start to bail.
Aside from the compliance problems, Super Micro is a fast-growing company making one of the most in-demand products in the technology industry. Sales more than doubled last year to nearly $15 billion, according to unaudited financial reports, and the company has ample cash on its balance sheet, analysts say. Wall Street is expecting even more growth to about $25 billion in sales in its fiscal 2025, according to FactSet.
Super Micro said last week that the filing delay has “had a bit of an impact to orders.” In its unaudited September quarter results reported last week, the company showed growth that was slower than Wall Street expected. It also provided light guidance.
The company said one reason for its weak results was that it hadn’t yet obtained enough supply of Nvidia’s next-generation chip, called Blackwell, raising questions about Super Micro’s relationship with its most important supplier.
“We don’t believe that Super Micro’s issues are a big deal for Nvidia, although it could move some sales around in the near term from one quarter to the next as customers direct orders toward Dell and others,” wrote Melius Research analyst Ben Reitzes in a note this week.
Super Micro’s head of corporate development, Michael Staiger, told investors on a call last week that “we’ve spoken to Nvidia and they’ve confirmed they’ve made no changes to allocations. We maintain a strong relationship with them.”
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