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Comment by jobgh | Hacker News Reader

The severance that is paid out is money that could have been paid out to owners (him)

No they couldn’t because the severance is paid out of the money the budget set aside for wages for the year. So out of the 12 months, they give 4 months to the laid off worker and Facebook pockets the other 8 months.

Facebook could give zero severance, "pocket the full year budget" to use your phrasing, and distribute it to owners as a dividend. The severance comes directly from cash that could have been distributed to owners, as GP originally said.

They don’t give severance to be nice, severance is hush money. To get the severance employees have to agree to forgo any legal claim they could have with the company. They have calculated that it’s cheaper to offer this money than to have to pay lawyers to defend the company from pissed former employees seeking to drag the company to court.

This is an entirely new claim from the one you made earlier and somewhat divorced from your original line of questioning around severance (https://news.ycombinator.com/item?id=47885133).

Ultimately, regardless of whether the severance is generous or just a calculated ploy to keep former employees quiet, it comes out of shareholders' pockets.

It is not my claim it is common knowledge. The problem is users here trying to pretend that a standard legal practice is Zuckerberg taking personal responsibility. No he is just following the advice of his legal team.

On severance: > the reality is that severance payments are just as much about protecting employers as they are about helping employees. In today’s complex labor landscape, employers are acutely aware of the risks associated with employment disputes and potential lawsuits. By offering severance payments, employers aim to minimize their exposure to legal claims, maintain compliance with labor laws, and safeguard their reputation in the marketplace. This practice is not just about goodwill—it’s a calculated move within the broader context of employment law and labor regulations, designed to manage risk and maintain control over the employment relationship. Understanding the real motivations behind severance payments is essential for both employees and employers navigating the ever-evolving world of employment.

https://capclaw.com/employers-pay-severance-out-of-fear-of-g...

This is assuming, though, that should shareholders want to take distributions the money wouldn't be there unless the layoffs are done. Facebook has plenty of cash to cover both if it shareholders or the board wanted to keep employee count stable and also pay out a comparable dividend.

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