Oracle rejects severance negotiations after mass layoffs

On March 31, Oracle laid off an estimated 20,000 to 30,000 employees via email. Following the layoffs, the company refused to negotiate severance terms with those affected. The severance package offered standard Corporate America terms: four weeks of pay for the first year, with total severance capped at 26 weeks, alongside one month of COBRA (Consolidated Omnibus Budget Reconciliation Act) health insurance. However, the package excluded accelerated vesting of Restricted Stock Units (RSUs). This exclusion caused significant financial loss for long-tenured employees; for instance, one worker lost $1 million in stock that was four months from vesting, with RSUs making up about 70% of his compensation.

Some laid-off employees discovered that their remote worker classification excluded them from protections under the Worker Adjustment and Retraining Notification Act (WARN Act), unless they worked in states with stronger provisions like California or New York. The WARN Act requires companies conducting mass layoffs to give employees two months notice prior to termination, a rule triggered when 50 or more people are impacted at a single location. By classifying employees as remote workers, the minimum location requirements can be sidestepped. Furthermore, a former Oracle employee stated that even for those covered, Oracle included the two months’ WARN notice pay within its existing severance calculation.

In response, at least 90 people signed a petition urging Oracle to negotiate, pointing to more generous packages offered by peer companies:

• Meta: Offered 16 weeks of base pay, plus two weeks for every year of employment, and covered COBRA for 18 months.
• Microsoft: Provided a minimum of eight weeks’ pay, with additional pay based on service, and accelerated stock vesting for long-serving employees, according to the Seattle Times.
• Cloudflare: After cutting 20% of its employees, the company offered base pay through the end of 2026, healthcare coverage through the end of the year, and accelerated stock vesting through August 15.

Oracle declined to negotiate. One of the employees cut that day described the sudden termination: “I had, like, this weird feeling in my stomach. I went to go sign into the VPN, and the VPN was like, ‘this user doesn’t exist anymore.’ Then I called my friend, and I was like, ‘Hey, can you see me in Slack?’ And she said, ‘No, your account’s been deactivated.’”

Why it matters

The situation underscores the limited protections for tech workers during mass layoffs, specifically how companies can use remote work classifications to potentially bypass WARN Act requirements and refuse severance negotiations.