Always make sure you are happy with what type of offsetting compensation you’ll receive in this eventuality before taking the job, and consider it a huge timesaver if an employer passes on you because you asked to negotiate a competitive severance package.
You don’t have to have some crazy special skillset or seniority. You just have to politely say no to any prospective employer who won’t offer it and keep searching.
Yes, of course negotiating power is limited if you’re in dire straits & must take any job. Definitely sucks and I wish we offered better protection to candidates in that situation.
But many people just don’t even think to ask, even when they already have a job they are OK to stick with if they need to turn down a different offer.
100% of the articles I have read about Tesla have been completely fabricated hit-pieces, or like this one, completely misleading. I think that at this point, they deserve the benefit of the doubt unless you're willing to actually read the article.
They purged contractors not long ago and are now laying off lots of people. Those are facts.
They reported that "production associates" are unaffected by the layoffs -- which doesn't mean that people working in production aren't impacted. It just means that they aren't laying off hourly employees in production. The editorial at the bottom of the article rationalizes the decision and reflects that it is ultimately good for the company.
IMO, it was a pretty balanced article that delivered potentially bad news in a fair way.
These articles you hear about Tesla are sometimes factual, but they're not published because they're factual. They're published to do damage and affect stock prices in a way that make specific people rich. It's the equivalent of playing poker, and affecting your neighbor's hand by distracting the dealer.
Every week there's a god damn article about Elon's "fall from grace" (what?) or about how he's trying to prevent unionization (you mean the fake unions that Ford has been trying to start, but workers aren't interested in?) or about subsidies (which are still a fraction of oil subsidies).
As a result, he made the mistake of criticizing the ethics of the media. So start expecting him to get the Gamer-gate treatment as the media pile on him even harder than before with fabricated news.
Every time I read a negative piece about Elon or Tesla, I worry "oh shit, is this the one?" and I look into the article and it's absolute bullshit. At this point, even if I read an article and it appears to be factual, I'd say the burden of proof is on the naysayers, and not on Musk or Tesla, given past performance.
Elon Musk is an amazing innovator and amazing PR guy. Few people can turn an idea into reality as well. But... he's running a high risk business whose rich valuation can go poof at any time. Because his personal name is inseparable from the firm, he's going to get heat for it.
The financial press has an obligation to talk about this stuff. Investors deserve to be informed.
In the actual email, Musk says this:
> As part of this effort, and the need to reduce costs and become profitable, we have made the difficult decision to let go of approximately 9% of our colleagues across the company
How is that not related to “financial trouble”?
Do you consider Elon Musks Twitter to be unbiased, real news?
You negotiate your starting salary, and that's it. So make sure you account for the likelihood that you will get zero notice and zero severance when you get fired. Which is to say you need to ask for more money, and save some of it in high-liquidity, low-risk form.
People wonder about salary inflation, but when you look at total compensation, it isn't quite so extreme. Companies cut or eliminate benefits, and employees have to demand higher salary to compensate. The salaries are going up at a higher than usual rate, because companies are slashing benefits packages faster than usual.
Those companies are figuring out the hard way that employees are not clueless about the value of their benefits. New employee candidates coming in will see the crap benefits and ask for more money. Existing employees will leave for either benefits more similar to what they once had, or for more money. In general, cutting the benefits results in being less competitive overall as an employer, because it usually costs less for a company to buy the benefits in bulk, than for employees to buy them piecemeal.
In the case of severance, the major advantage for the company doing it is that you absolutely cannot spend that money on anything else until you are fired. You could get that by buying a special insurance policy for unplanned unemployment, or you can discipline yourself to never touch your "severance fund" except in dire emergency. Also, you are taxed on a severance payment in a year when you otherwise have less income, because you got fired, whereas a personal "severance fund" is taxed as you earn the principal, and again when you liquidate, if you realized gains. Make sure the company will be paying for all that before you start work, because once you start, most of your leverage disappears. They no longer need to convince you to quit your previous job, and only need to do just enough to keep you from quitting your new one.
The last severance I got was in 2002. No company since has ever been willing to pay it out or even negotiate the possibility. Severance is dead. Long live the personal "oh shit" fund. Make your employer pay you enough to have one, along with a personal retirement fund, a personal vacation fund, a personal health care fund, a personal commuting budget, and personal equivalents of all those other things that many companies once paid for, but no longer do.
We don't need a union, if everybody can individually commit to asking for more money.
These are generally legally enforceable, and severance is not merely a discretionary component that is up to the company. It's something you can (generally without that much trouble) actually sue for, similar to unpaid wages, if the company terminates you without paying.
I have never once heard of a company requiring a C-suite executive to get involved for creating these very routine types of severance agreements for regular employees, and I myself have negotiated severance in a standard at-will employment agreement at my three most recent jobs.
Don't tell me I'm wrong. I lived it.
They don't want to do it because, like offering vacation instead of PTO, it represents a cost of firing someone. They very much want to be able to drop anyone, at any time, for free, as that means they don't need to set aside money for firing people.
Large firms usually have a very low baseline severance plan calculated something like 1 week of pay for each year of tenure, and they may say in the handbook it is only offered on a discretionary basis at the time of termination.
But I’ve always had no problem negotiating a customized severance package regardless of whether a firm had that sort of policy, especially because severance should fairly reflect compensation for any time or opportunity costs an employee might endure due to a non-compete agreement, etc., which means usually it should be at least several months of salary and possibly continuation of benefits (e.g. not externalizing that cost to the employee through COBRA but actually continuing to pay their premiums for a set amount of months).
Huge companies are harder to convince of this, and in that case I was able to negotiate the severance amount to instead be paid as a sign-on bonus, so that saving the money to cover costs in the event of being terminated was my responsibility, but the company still agreed to pay for it.