Published on 28 Feb 2023

Dismissed tech workers got lavish severance pay but unclear others will

If retrenchments broaden to other parts of the economy, those affected may not be as lucky

For anyone watching the slew of tech layoffs in the preceding months from the sidelines, it can feel like a world turned upside down.


First, tech companies, flush with cash and competing hard to hire tech talent during the Covid-19 e-commerce boom, did a U-turn and started to fire people mercilessly.

Microsoft, Meta, Alphabet and Salesforce have let go of almost a third of everyone they hired since 2019. In Singapore, Sea has seen three rounds of retrenchments and Grab is struggling to keep its pledge of zero mass layoffs.

Second, tech workers, once seen as among the best and brightest professionals with careers taking off, were made redundant overnight.

These two things put together challenge the conventional wisdom we were taught regarding skills upgrading and career resilience: Get a job in a fast-growing sector, arm yourself with future-ready skill sets geared towards a digital world, and you're set up for success.


This desync has been made all the more uncomfortable when tech firms have for years framed a role in technology as a calling with a higher purpose and belonging to a community of like-minded peers rather than a job.

Many have applied this narrative skillfully to hire, retain and hoard talent. Google called its workforce "Googlers" to invoke a common identity to instil a sense of pride. Salesforce used "Ohana", the Hawaiian word for family and shared roots, to describe its organisational culture and laud its closely-knit collaborative relationships.

And so tech workers who bought into this notion of family paid the price: They worked endlessly in furthering the larger interests of the corporations. The hours were typically insane. The tech sector fuelled an always-on culture with shifting goalposts.

True, tech workers had it good – they had envious jobs at swashbuckling firms reshaping the world and a suite of cushy perks of free buffet lunches, yoga sessions and beer Fridays. But they truly believed all their work would amount to something for the firm and for themselves.

Loyalty was assumed to be a two-way street but this bucked the reality of an employer-employee relationship, which has always been an economic transaction for the company. This contradiction in how each party has regarded the work contract has come home to roost, as the tech layoffs revealed how little tech firms hesitated in pursuing aggressive cost-cutting measures in the face of pressure from rising interest rates and impatient investors.

Staff at Twitter's Singapore office reportedly had their work accounts terminated and told unceremoniously to vacate the premises by 5pm the same day they were informed of their dismissal in January.

Surviving employees were no better off, facing burnout from having to pick up the slack, lost productivity from dealing with the departure of colleagues, and low morale.


But was it really a betrayal? Leaving aside the breach in the psychological contract tech workers thought they had with their firms and beyond the cut-throat manner in which tech workers were told to go, they seem to have received a pretty good bargain going by the generous severance packages received.

In an e-mail to employees, Mr Sundar Pichai, CEO of Google and Alphabet, indicated that retrenched Googlers would be paid 16 weeks' salary plus two weeks per year at Google. It is unclear if this standard was evenly applied across the board, but at least one laid-off Singapore employee indicated he was getting "more or less the same severance pay" as colleagues in the United States.

Salesforce said affected workers would get a minimum of "nearly" five months of pay, and Twitter employees were said to have received three months of salary.

This is more generous than that required by law, where the norm is a retrenchment benefit of between two weeks and one month's salary per year of service, depending on the company's financial health and the industry, according to the Ministry of Manpower guidelines.

The record on retrenchment benefits is more troubling outside the tech sector, with my research indicating that consulting firms tended to give senior executives better packages than the legally required norm but dished out the minimal for junior-level staff, and those from small and medium-sized enterprises often received below-the-norm compensation or nothing at all.

Given this backdrop and the conventional wisdom that there is no "market rate" for severance pay, which can include financial compensation, extension of healthcare provisions and other benefits, a portion of expected bonus, accelerated vesting of stock and career matching, the consistently generous figures by tech firms suggest tech workers did not have it bad on the whole.

Generous severance packages work in the tech firms' favour and are perhaps intended to defuse tensions, reduce liabilities and mitigate the nasty effect of layoffs on the company's reputation. Tech firms might find it in their interest to soften the blow, so that fired employees are convinced to go quietly into the night.

Not bad then for tech workers – many of whom also saw their incomes almost double in switching jobs in 2021, according to tech career platform NodeFlair.

For a select few, like Mr Henry Kirk, a former senior manager at Google Services, the retrenchment may just have been the nudge needed to begin a new phase in his career. It prompted Mr Kirk to reach out to other Googlers and form a design and development studio in New York for start-ups seeking to attract funding.


The greater worry should be that this wave of tech retrenchments may be an early warning of layoffs in the broader economy, especially sectors that might have less mobile workers with transferable skills.

Poor-performing sectors such as non-oil domestic exports (Nodx) – which have struggled with double-digit contractions due to a gloomy global outlook – may be expected to commence their own rounds of layoffs over the next three quarters as these sectors expect a contraction of up to 2 per cent in 2023.

Analysts have also indicated that the Singapore labour market could ease after tightness in 2023, with demand in external-facing industries like electronics, chemicals, precision engineering and wholesale trade remaining lacklustre, given the potential trade headwinds there.

The outlook for the labour market remains patchy and will be uneven across sectors, especially as recovery in air travel and international arrivals will benefit the aviation and tourism-related sectors like hospitality, retail and F&B. The challenge is whether workers can transition easily into new job families and industries.

Unlike workers in many other sectors, tech workers remain in high demand with their horizontal IT skill sets, especially in sectors and firms hungry to build digital infrastructure and turbocharge their digitalisation journey. Fresh grads with degrees in information communications and digital technologies in Singapore continue to earn a premium over their other peers majoring in another subject, with the highest-grossing average monthly income of $5,625, according to the Joint Autonomous University Graduate Employment survey released last week.


Those of us still feeling perturbed by the fast-and-furious manner in which tech firms laid off workers can take comfort in two things.

First, work isn't life and looking after your interests as an employee in a world where you might be made redundant because of factors outside your control should be a key priority.

Ironically, this is a lesson the Gen Zers, with their insistence on drawing clear boundaries between work and life and on quiet quitting to achieve that, might be onto something. A survey conducted among over 100 Nanyang Business School class of Gen Z students in 2021 show 88 per cent of correspondents believe they will have to work harder than Millennials, yet 64 per cent also said they will explore greener pastures and search for a better job if their basic needs can be met.

Second, although the tech layoffs may have suggested that tech jobs are no longer attractive or offer career stability, the reality is that tech professionals remain in demand elsewhere and can still draw high salaries.

Technology will continue to undergird the growth of Singapore's economy and create job opportunities despite the ongoing massive tech job cuts around the world, said Minister for Communications and Information Josephine Teo in January at the launch of Step It Up, a tech talent conversion programme.

Indeed, even in the worst of times, in getting laid off, tech workers don't seem to be drawing a poor deal.

Source : The Straits Times

Dr Koh Cheng Boon is Senior Lecturer at the Nanyang Business School at the Nanyang Technological University and Deputy Director of the Asian Business Case Centre.