Here are the layoff severance packages Google, Microsoft, Amazon and other tech giants have promised
Google headquarters is seen in Mountain View, California, United States on September 26, 2022. (Photo by Tayfun Coskun/Anadolu Agency via Getty Images)
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Tech companies have laid off tens of thousands of workers in recent months as the industry grapples with a reduced risk appetite from investors and increases in borrowing costs. Laid-off employees across the tech sector enter an uncertain job market, with headcount reductions taking place across all experience levels and teams. Few companies, with the possible exception of Apple, have been immune.
Laid-off workers will receive severance packages of varying size and duration, depending where they work. Here’s what some of the biggest tech names have promised their employees.
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Alphabet
On Friday, CEO Sundar Pichai said Google would lay off 12,000 workers across “product areas, functions, levels, and regions.” Laid-off U.S. employees will receive pay through the notification period and receive a 16-week base severance package with an additional two weeks for every year of employment at Google.
Laid-off employees would also have “at least” 16 weeks of share vesting accelerated, Pichai said in a memo to employees. Employees would also receive 6 months of healthcare coverage.
A Securities and Exchange Commission filing from Google parent company Alphabet shared the memo from Pichai, but did not specify the cost of the layoffs.
CNBC previously reported that employees had been anticipating layoffs with mounting anxiety, and on a heated Sept. 2022 all-hands meeting where employees pushed back against Pichai’s cost-cutting efforts.
Microsoft
On Wednesday, Microsoft said it was laying off 10,000 employees as the software maker anticipated slower revenue growth for the upcoming year. The cuts will take place through the end of March, with a spokesperson telling CNBC that sales and marketing teams would see deeper cuts than engineering.
CEO Satya Nadella said in an employee memo that some would learn this week if they were losing their jobs.
Benefit-eligible U.S. employees are to receive severance, six months of healthcare and stock vesting, and 60 days of notice, Nadella wrote. The Microsoft CEO had already alluded to potential cost-cutting efforts in an interview with CNBC-TV18.
“We will have to also get our own sort of operational focus on making sure our expenses are in line with our revenue growth,” Nadella said.
Microsoft will take a $1.2 billion impairment as a result of its restructuring and layoff efforts.
Amazon
Amazon has been going through rolling layoffs since last year. In November, it began job cuts that primarily affected units like recruiting and devices and services. At the time, the company offered its devices and services employees a severance package that included a separation payment, transitional health benefits, and job placement.
Earlier this week, it commenced its latest wave of layoffs, with the deepest cuts being felt in its retail and human resources divisions.
For retail employees in the U.S., Amazon is offering full pay and benefits over a 60-day period where Amazon will continue to keep them on the payroll, but they won’t be expected to keep working. After that period, Amazon will offer laid off employees several weeks of severance depending on the length of time with the company, a separation payment, transitional health benefits and job placement.
Amazon’s severance package appears similar for affected employees in other units. Human resources head Beth Galetti said the company will offer a separation payment, health benefits as applicable by country and job placement.
It’s unclear if Amazon’s severance package includes any provisions that would allow employees to accelerate the vesting of stock compensation. This matters to Amazon employees, as the company’s compensation has historically been weighted heavily to stock. An Amazon spokesperson didn’t immediately respond to a request for comment.
Salesforce
CEO Marc Benioff told employees on Jan. 4 that Salesforce would reduce headcount by about 10%, or more than 7,000 workers, in response to a challenging economic environment. Laid-off employees would receive a minimum of “nearly” five months of pay. Benioff’s letter to employees also said that laid-off employees would receive health insurance benefits and career resources for an unclear duration.
Some employees who lost their jobs were notified the same day.
“Those outside the U.S. will receive a similar level of support,” Benioff wrote. The company anticipated taking a one to $1.4 billion impairment related to severance payments and “employee transition” amongst other things, according to an 8-K filing.
Benioff told employees more layoffs could be coming, just days after announcing those January cuts.
Meta
CEO Mark Zuckerberg announced on Nov. 9 that over 11,000 jobs would be cut as part of an effort to become a “leaner and more efficient company.” Meta shares had been heavily bruised for months prior, and investors had begun to more actively criticize Zuckerberg’s expensive pivot to virtual reality.
Mark Zuckerberg, chief executive officer of Meta Platforms Inc., center, departs from federal court in San Jose, California, US, on Tuesday, Dec. 20, 2022.
David Paul Morris | Bloomberg | Getty Images
At the time, Zuckerberg promised “every” laid-off employee 16 weeks of severance, plus two weeks for every year of service, as well as RSU vesting and health insurance coverage for a predetermined amount of time.
In Dec. 2022, some laid off workers from a non-traditional apprenticeship program told CNBC that they were receiving substandard severance packages compared to other recently laid off employees. Instead of Zuckerberg’s promised 16 weeks, they received only 8 weeks of base pay, amongst other material differences.
Layoffs at Twitter began shortly after Elon Musk completed his takeover deal in 2022. Twitter had been expected to lay off over 3,700 employees, or over 50% of its workforce. Ultimately, many more employees quit after Musk announced that Twitter employees would be expected to commit to a “hardcore” work environment.
Under the terms of Musk’s buyout deal, existing severance agreements were to be honored by new management. But a group of Twitter employees filed suit in November, shortly after layoffs were executed, accusing Twitter of laying them off in violation of California’s layoff-notification law.
Musk had previously said that laid-off employees would receive three months of severance pay, but some Twitter employees claimed that in return for a non-disparagement agreement and a legal waiver, Twitter would offer them only one month of severance.
The class action was updated shortly after filing with allegations that Twitter was offering some laid-off employees half of what they had been promised.
Twitter also laid off over 4,000 contract workers without giving them prior notice, CNBC previously reported.
CNBC’s Annie Palmer, Jonathan Vanian, Jennifer Elias, Jordan Novet, Lora Kolodny, Ashley Capoot, and Sofia Pitt contributed to this report.
Amazon said Tuesday it received regulatory approval to begin flying a smaller, quieter version of its delivery drone, the latest step in its long-running efforts to get the futuristic program off the ground.
The company unveiled the new drone, called the MK30, in November 2022. It said then that the MK30, in addition to the other changes, would fly through light rain and have twice the range of earlier models.
Amazon said the Federal Aviation Administration’s approval includes permission to fly the MK30 over longer distances and beyond the visual line of sight of pilots. The agency granted a similar waiver for Amazon’s Prime Air program in May, though that was limited to flights in College Station, Texas, one of the cities where it has been conducting tests.
Alongside the FAA approval, Matt McCardle, head of regulatory affairs for Prime Air, said the company is starting to make drone deliveries Tuesday near Phoenix, Arizona. In April, Amazon said it planned to spin up drone operations in Tolleson, a city west of Phoenix, after it shut down an earlier test site in Lockeford, California. The company will dispatch the drones near one of its warehouses in Tolleson as it looks to integrate Prime Air more closely into its existing logistics network and further speed up deliveries.
An FAA spokesperson said the agency granted Amazon permission to conduct beyond visual line of sight deliveries in Tolleson on Oct. 31.
Amazon founder Jeff Bezos first unveiled plans for the ambitious service more than a decade ago, remarking at the time that the program could be up and running within five years. Despite Amazon investing billions of dollars into the program, progress has been slow. Prime Air encountered regulatory hurdles, missed deadlines and had layoffs last year, coinciding with widespread cost-cutting efforts by CEO Andy Jassy. The program also lost some key executives, including its primary liaison with the FAA and its founding leader. Amazon hired former Boeing executive David Carbon to run the operation.
It’s also encountered pushback from some residents in the cities where it’s trialing drone deliveries. Residents in College Station complained about the noise levels enough that it prompted the city’s mayor to mention the concerns in a letter to the FAA, CNBC previously reported. In response, Amazon executives told residents the company would identify a new drone delivery launch site by October 2025.
Amazon isn’t the only company trying to crack delivery by drone. It’s competing with Wing, owned by Google parent Alphabet, UPS, Walmart and a host of startups including Zipline and Matternet.
WATCH: How Amazon’s drone delivery program stacks up to competitors
Palantir Technologies CEO Alex Karp appears on a Bloomberg television interview during the FoundryCon event in Palo Alto, California, on March 7, 2024.
David Paul Morris | Bloomberg | Getty Images
Palantir shares jumped 23% on Tuesday and headed for a record close after the data analytics software maker reported robust third-quarter results and issued uplifting revenue guidance.
The stock reached a high of $51.19, above the prior record of $45.14 reached last week. If the gain holds, it will mark the stock’s biggest jump since Feb. 6, when shares popped 30%.
Revenue climbed 30% to $726 million from a year earlier, topping the $701 million average analyst estimate, according to LSEG. Adjusted earnings per share of 10 cents beat the 9-cent average estimate.
Analysts at Deutsche Bank said in a report that “the beat was driven by better-than-anticipated US Government performance,” boosted by demand for artificial intelligence tools.
“Palantir is among a handful of infrastructure software companies that have started to meaningfully monetize generative AI, where its competitive positioning benefits from longtime investment and deep expertise in complex data integration, and particularly its reputation for data security built into its ontology,” the analysts wrote.
Net income of $143.5 million, or 6 cents per share, was up from $71.5 million, or 3 cents per share, in the same quarter a year ago. The company called for fourth-quarter revenue of $767 million to $771 million. Analysts surveyed by LSEG had been looking for $741.4 million.
Palantir is targeting more than $687 million in U.S. commercial revenue for the year, implying about 24% of the total.
Bank of America bumped its price target from $50 to $55 and maintained its buy rating.
“We continue to view the adoption of PLTR’s AI-enabled products and reach in its early days, as more companies realize the time, resource, and cost savings possible,” Bank of America analysts wrote in a note to investors. “In our view, Palantir’s moat as the differentiated agnostic AI-enabler is only growing with each new use-case carrying compounding unit economics.”
— CNBC’s Jordan Novet and Michael Bloom contributed to this report.
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