Computers, cash, crumbs: Here’s what Australian tech workers get paid after lay-offs

Australian tech workers who lost their role after overambitious companies sought to reserve capital received severance pay which varied as much as 12 weeks, or nearly three months’ pay.

Employees with less than 12 months in a role ​are not owed severance pay in Australia.

As Australian tech workers face the fallout of overambitious companies which chose growth at all costs, workers have received severance packages which have varied by as much as 12 weeks – or about three months’ salary.

The disparity is such that some workers let go in August would have received salary covering a period through November, whereas others would have only received enough to get them through part of September.

The mass lay-offs arrive after a near 18-month long ambitious growth period during the pandemic for local tech start-ups, during which new workers and graduates were hired on salaries almost 2.5 times that of the median Australian salary of $62,400.

Valuations are now coming under pressure as the sharemarket downturn flows through to privately held start-ups, and once bullish investors seek cashflow-positive plans.

While tech lay-offs, aside from the initial Covid-19 stand-down period, began as early as late 2021, the initial aftermath only hit a limited number of companies. It wasn’t until February when well-known companies were hit, such as Booking.com, Lido and Peloton.

Tech job marketplace TrueUp said that by the end of June, a further 357 global companies had laid off a total of 66,093 staff.

The website has recorded 188,197 global lay-offs, which include a number of Australian companies, since December last year.

At least 20 tech companies have cut local jobs over the past year, which The Australian understands to be well over 1000 roles.

Some of these companies have attempted to downplay their lay-offs under the guise of a “restructure”.

Few of the companies contacted by The Australian were willing to share further detail about their lay-offs, with some including Skedulo, which laid off staff in September, refusing to specify what those workers were paid or whether they had even received their departure pay.

Those who were a little more transparent included Mr Yum, Banxa, Linktree, Swyftx and HealthMatch.

HealthMatch chief executive Manuri Gunawardena. Picture: Sam Ruttyn

Facebook ANZ managing director Will Easton confirmed on Thursday a number of Australia roles in recruitment, sales and business were “impacted by Meta’s global restructure”.

“While we have maintained media partnerships resources in Australia, user preferences have shifted to creator driven content in products such as Watch and Reels, and this is where we will focus moving forward,” he said.

It’s understood the severance paid to Australian workers matched that announced by Mr Zuckerberg.

HealthMatch chief executive Manuri Gunawardena said she gifted computers to staff but would not disclose severance amounts.

“It’s obviously an incredibly difficult market for tech at the moment, and we were caught in a hard position of ultimately having to make significant reductions in our team size to weather the market with uncertainty at that time,” she said.

“We also consulted significantly with advisers to ensure we were doing the right thing by each of our employees in this difficult circumstance.

“Where possible we went above and beyond to ensure we could minimise any impact on affected employees.

“We provided our team with their redundancy payments, leave and where equity cliffs were approaching, accelerated vesting where possible. We also provided affected team members their computers to help in the search for a new role.”

Mr Yum, a QR code menu start-up which had its technology rapidly adopted amid the pandemic, was spruiking a valuation of about $400m in late 2021. In August, it announced company-wide lay-offs, cutting 17 per cent of staff.

“All impacted Mr Yum team members (including those still in a probationary period) were paid a severance package that included a minimum of six weeks’ pay on top of notice periods, accelerated stock option vesting, career transition support and extended access to our employee mental health support portal,” a spokesman told The Australian.

“All affected team members have received their entitled severance package, which was paid out punctually.”

Some employers believe they can forgo redundancy payouts if they find the employee another role.

Mr Yum’s notice period varied between roles but typically was four weeks, meaning staff were paid about 10 weeks of pay, not including leave.

A spokeswoman from Australian social media start-up Linktree – which laid off 17 per cent of its workforce – said staff were gifted all of their work-from-home equipment.

“Linktree went beyond statutory requirements in all markets, and paid those impacted an average of 11 weeks’ severance within five business days,” she said.

“Impacted teammates also received accelerated vesting, outplacement support, computer and work-from-home equipment, mental health support and more.”

A global spokeswoman from Swedish BNPL Klarna, which cut 560 roles in May and what is understood to be a further 100 roles in September, would not disclose severance pay details.

“All employee agreements are confidential so neither Klarna nor its former employees are in a position to share specific details. However we can confirm that our packages and processes were generous, fair and reasonable,” she said.

The spokeswoman described Klarna’s move as a “reorganisation” rather than job cuts, despite more than 10 per cent of staff being let go. The move included the company “chief expansion officer” Camilla Giesecke having her title extended to include “chief operating officer”.

The Australian has been contacted by some workers who claimed to not have received departure pay as they were still in their probationary period.

Employer lawyer Melanie Thorley said that was legal under Australian law which states that employees with less than 12 months in a role were not owed severance.

“Probationary periods don’t actually exist in law anymore. There’s nowhere in the Fair Work Act that talks about probation and there is nowhere in the awards that talks about probation,” she said.

“It’s normally a clause in the contract that says you’re under probation. You can be terminated for any reason and that’s actually strictly not true either.”

Ms Thorley said as an example an employee could not be dismissed for discriminatory reasons even during a probation but an employee may not file an unfair dismissal if they have worked for less than 6 months or 12 months in a small business.

Melanie Thorley of MJT Law. Picture: Russell Brown.

An issue Ms Thorley’s firm, MJT Law, had seen as of late was a number of employers believing they could forgo redundancy pay if they found the employee another role.

“What they’ve failed to do is consider section 120 of the Fair Work Act which requires them to go to the Fair Work Commission and make an application and request to reduce that redundancy,” she said.

Online, Fair Work advises that employers apply to reduce the amount of redundancy pay required if they, the employer, finds other acceptable employment for the staff member or if the employer “can’t afford the full redundancy amount”. The rules apply only to companies under the National Employment Standards which are required to pay a minimum of four weeks’ severance pay.

A spokesman from ASX-listed Banxa said all employees were paid severance on top of pay for notice periods.

“This difficult decision put Banxa in a better position to weather a persistent market downturn and continue building essential web3 payment rails and compliance infrastructure. Banxa has no additional hiring plans at this time, and the company’s financial position remains strong heading into 2023,” he said.

Swyftx, which merged with SuperHero in June, cut 21 per cent of staff, or a total of 74 roles.

Staff received at least four weeks and minimum service requirements to access vesting options were removed.

“All team members affected by the team changes in August (including a small number of staff in their probation period) were paid severance,” a spokesman said.

Shopify, which cut 10 per cent of its 10,000 staff in July, paid employees 16 weeks of severance pay. one week per year of service, vesting options, gifted WFH equipment, reimbursed internet during the four-month severance period, gave an allowance for laptops, provided career coaching and gave staff a Shopify subscription plan.

While many companies have resorted to quietly laying off staff, others have been more public.

Twitter owner Elon Musk has not been shy to engage in public disputes on his newly-bought platform, replying to tweets by staff who have challenged on the platform letting them know they have since been let go.

According to TrueTech, Twitter lay-offs account for about 11.7 per cent of the 37,400 lay-offs in November so far.

Mr Musk has reportedly laid off about 50 per cent of staff – including the social media giant’s entire Australian public relations team – accounting for about 3750 of Twitter’s 7500 staff.

 

Staff have reportedly received 12 weeks of severance pay but little else is known of leave and healthcare benefits.

Facebook parent company Meta is laying off a total of 11,000 staff, accounting for 29.4 per cent of TrueTech’s reported lay-offs this month.

Meta employees will receive 16 weeks of base pay, two weeks of pay per year of service, all leave benefits paid, vesting options until November 15, six months of health insurance (in the US) and career services and immigration support, according to a blog post from Facebook founder Mark Zuckerberg.

Amazon and Salesforce have also announced job cuts, cutting 11,000 and 950 roles respectively.

Amazon’s local PR team declined to comment. Meanwhile, Salesforce gave the same generic response as their US outfits: “Our sales performance process drives accountability.

“Unfortunately, that can lead to some leaving the business and we support them through their transition.”

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