Tech Layoffs in San Francisco: What to Know About Your Severance Package

You just got called into a meeting, and now you're sitting in a conference room (or staring at a Zoom screen) holding a severance agreement while someone from HR reads a script. If you're one of the thousands of San Francisco tech workers who have been laid off in recent rounds of cuts, this guide is for you.

Bay Area tech layoffs are different from layoffs in other industries. Your compensation probably included stock options, RSUs, or some other equity component. Your offer letter may reference IP assignments, non-competes, and post-employment obligations that were written by a legal team in another state. And the severance package HR just handed you? It's designed to close things out quickly and cheaply for the company. Not for you.

Start With the Equity

For most SF tech workers, equity is the single biggest thing at stake in a severance negotiation. Not the cash. The equity.

Vested stock options. These belong to you. But here's the catch: you usually have just 90 days after your last day to exercise them. If you can't come up with the cash to cover the strike price and the tax bill in that window, your vested options expire. That's money you earned, gone because of a deadline.

Ask for a longer exercise window. Six months. Twelve months. Some Bay Area companies like Pinterest and Coinbase have set precedents with extended exercise windows of seven to ten years. Your company may not go that far, but 90 days is a floor, not a ceiling.

Unvested equity. When you're terminated, unvested stock options and RSUs are forfeited. If you were two years into a four-year vesting schedule at a company in SoMa or down on the Peninsula, that's half your equity grant gone. Negotiate for accelerated vesting. Full acceleration is a big ask, but partial acceleration (an extra 6 or 12 months of vesting credit) is reasonable and common in tech layoffs.

RSUs at public companies. If you were at a publicly traded company, your unvested RSUs vanish at termination. Vested RSUs that haven't settled yet should still be delivered per your plan documents. Read the severance agreement carefully to make sure it doesn't quietly alter the settlement timeline.

Non-Competes Are Void in California

This comes up constantly with SF tech workers, especially those who work for companies headquartered in states like Texas, New York, or Washington. The company's legal team drafts a severance agreement with a 12-month non-compete, and it lands on your desk in San Francisco.

California Business and Professions Code Section 16600 makes non-compete clauses void. Period. AB 1076, which took effect January 1, 2024, went further and made it explicitly illegal for employers to even include non-compete provisions in agreements with California employees. SB 699 extended this protection so that non-competes signed in other states can't be enforced against you if you work in California.

If your severance has a non-compete, demand it be removed. Don't accept "oh, it's just standard language" as an answer. A non-compete in a signed document can still spook your next employer, even if it's technically unenforceable. Get it out of the agreement entirely.

The WARN Act and Large-Scale Bay Area Layoffs

If your company laid off 50 or more employees within a 30-day period, the federal WARN Act likely applies. California's version (Cal-WARN) is even broader: it covers employers with 75 or more employees and doesn't require the same percentage thresholds as federal law.

Under WARN, you're entitled to 60 days' advance notice of a mass layoff. If the company failed to give that notice, you may be owed up to 60 days of pay and benefits on top of whatever severance they're offering. This is separate from the severance package. It's a legal obligation.

Tech companies sometimes try to structure layoffs to dodge WARN. They spread terminations across weeks, or count employees by office location to keep each site below the threshold. If you were part of a larger wave of cuts at a Bay Area company, it's worth looking at whether the numbers trigger WARN requirements.

IP Assignments and Post-Employment Restrictions

Tech severance agreements almost always include intellectual property provisions. Two things to watch for:

Overly broad IP claims. Some agreements try to extend the company's claim to inventions and code you create after you leave. California Labor Code Section 2870 protects you here. Your employer generally cannot claim ownership of things you build on your own time, with your own equipment, that don't relate to the company's business. Make sure the agreement doesn't override these protections.

Non-solicitation of former teammates. Many SF tech companies include clauses that prevent you from recruiting your former colleagues. California courts have increasingly treated these as restraints on trade that violate Section 16600. If your agreement includes a non-solicitation provision, it deserves the same pushback as a non-compete.

Severance Benchmarks in SF Tech

What's "normal" varies a lot depending on company size and stage:

Large public companies (the big names on Market Street or in the Financial District): typically 2 to 4 months of base salary, plus equity treatment, COBRA coverage, and outplacement services. Mid-stage companies (Series C and beyond): 1 to 3 months, with more variation in equity flexibility. Early-stage startups: cash severance is often minimal, but there's usually more room to negotiate equity terms, exercise windows, and other non-cash items.

These are starting points. Your leverage depends on your role, your tenure, any potential legal claims you might have, and how the company is managing the layoff overall.

Don't Sign the Standard Package

San Francisco tech companies process layoffs at scale. The agreement they hand you was written for efficiency, not fairness. Your specific equity situation, your potential claims under California law, and your post-employment plans all make your package worth individual attention.

If you were laid off from a tech company in San Francisco or the Bay Area, our employment attorneys can review your severance package. We understand the equity, IP, and California law issues that make tech severance different from everything else. Free consultation.