I know there’s probably little sympathy for highly compensated big tech workers right now, but I wanted to give some insight into some of the struggles those recently laid off are facing and how it plays into the overall systemic issues we’ve all been dealing with.
For those that don’t know, most big tech companies pay a base salary and award additional stock on top of that. Those are called Restricted Stock Units or RSUs.
The way they work is you are given a certain amount of of them, but cannot access any of them immediately. They use something called a vesting schedule.
Most companies have them vest over 4 years with various periods in between but let’s assume every 6 months. This means you get 1/8 of the stock you were awarded every 6 months for 4 years.
You don’t get your first vesting until 6 months AFTER it was awarded.
If you leave the company before it all vests, you forfeit the unvested stock even though it was given to you already.
This is typically used as retention tool, but it’s so much more devious than that. It benefits the company far more than the employee.
I could rant about that part for a while but it’s not within the scope of this post.
Remember how I said if you leave the company you lose what hasn’t vested? That includes layoffs.
The company can award you a bunch of stock, then lay you off and you lose it. You also typically take a hit to base salary for this “perk”.
During layoffs they will typically do some kind of “accelerated vesting” but that usually only gets you 1-2 vesting cycles and the rest is lost.
There are so many people that lost so much money this way on the recent layoffs. It’s basically like a company stealing 10s or 100s of thousands of dollars from your hard to touch savings account.
The system is broken, even for high earners. Whether you make $20k a year or $200k everything is rigged against you and in favor of greedy companies.
Edit:
I understand that it’s not technically money you’ve been paid until it vests. The issue is that it’s often a significant or the largest part of your compensation. When awarded you’re told “you’ve been granted $50k of stock this year”. Then the company can basically erase that compensation when you’re laid off through no fault of your own.
If you’re fired or voluntarily leave, I see no issue. Layoffs should pay out the remainder of your unvested stock.