Tech layoffs in Canada can leave employees entitled to substantial severance pay. If you’ve lost your job at a technology company, your employer’s first offer isn’t necessarily your full entitlement. Severance can reach up to 24 months’ pay.
Software engineers, developers, IT professionals, product managers, sales employees and technology executives all have employment rights when their positions are eliminated.
Your severance package should reflect your full compensation, including salary, bonuses, benefits and applicable stock-based awards.
💡 Laid Off From a Tech Company? You’re not limited to the minimum severance offered by HR. Your full compensation can include bonuses, stock options and restricted share units (RSUs). Before you sign, always check first.
On This Page:
- Tech Layoff Rights
- How Much Severance?
- Bonuses, Stock Options & RSUs
- Mass Layoffs
- What to Do After a Layoff
- Frequently Asked Questions
What Are Your Rights After a Tech Layoff in Canada?
A permanent layoff is a termination of employment. Non-unionized technology employees are entitled to the notice or compensation required by law and their enforceable employment agreements.
Your employer can’t avoid its termination obligations by calling your dismissal a restructuring, downsizing, redundancy or cost-cutting measure.
The employment lawyers at Samfiru Tumarkin LLP represent non-unionized tech employees in Ontario, Alberta and British Columbia.
For the latest major job cuts and general employee protections, visit our Layoffs in Canada guide.
How Much Severance Pay Do Tech Employees Get?
Technology employees can receive up to 24 months’ pay when terminated without cause. Your entitlement depends on several factors:
- Age: Your age when employment ends
- Length of service: How long you’ve worked for the company
- Position: Your role, responsibilities and seniority
- Job market: The availability of comparable employment
- Employment contract: Whether enforceable terms limit your entitlement
There is no automatic one-week-per-year formula for full severance in Canada. Even employees with relatively short service can be owed several months of compensation. There are also unique considerations for executive severance packages.
Use our free Severance Pay Calculator to estimate what your termination package should be worth.
Are Bonuses, Stock Options and RSUs Included in Tech Severance?
Severance isn’t limited to base salary. Technology employees often receive a substantial part of their compensation through bonuses, commissions and company equity.
A full severance review should examine:
- Salary: Regular compensation during the applicable notice period
- Bonuses and commissions: Incentive payments you would have earned
- Stock options: Vested options and awards scheduled to vest during the notice period
- RSUs and PSUs: Restricted and performance share awards, including applicable vesting rights
- Benefits and retirement contributions: Health coverage, pension and employer RRSP contributions
Your employment contract and equity-plan documents determine how these rights are calculated and whether enforceable restrictions apply.
Don’t accept HR’s statement that all unvested equity is lost on your termination date without having the documents reviewed.
Learn more about stock options after termination and bonuses and severance pay.
Does a Mass Layoff Reduce Your Severance Pay?
No. Being laid off alongside hundreds of other employees doesn’t automatically reduce your individual severance entitlement.
Technology companies can eliminate jobs during restructuring, mergers, automation and financial downturns. They must still comply with applicable termination and severance laws.
Special mass-termination rules can also apply when large numbers of employees lose their jobs. These rules differ between Ontario, Alberta, British Columbia and federally regulated workplaces.
Even when everyone receives the same standard package, employees can have different entitlements based on their circumstances.
For company-specific information, see our coverage of Oracle layoffs and other major job cuts in our Canadian layoffs tracker.
What Should You Do After Being Laid Off From a Tech Company?
Before accepting a severance offer:
- Get your termination documents. Keep your employment agreement, severance offer and release.
- Review all compensation. Gather bonus plans, equity grants, vesting schedules and benefits information.
- Check stock option deadlines. Vested options can have short exercise windows after termination.
- Apply for Employment Insurance. Don’t delay your application while negotiating severance.
- Have your package reviewed. Don’t sign away your right to additional compensation.
⚠️ Given a Deadline to Sign? Your employer’s acceptance deadline isn’t automatically your legal deadline. Don’t sign a severance release before determining whether you’re owed more.
Learn what an employment lawyer examines during a severance package review.
Tech Layoffs Canada: Frequently Asked Questions
Do Software Engineers Get Severance Pay?
Yes. Software engineers, developers and other non-unionized tech employees are entitled to applicable termination compensation when dismissed without cause. Full severance can reach 24 months’ pay.
Do You Lose Unvested RSUs When Laid Off?
Not automatically. RSUs that would have vested during your legal notice period can form part of your compensation. Your employment agreement, equity plan and vesting schedule must be reviewed together.
Can a Tech Company Offer Only Two Weeks’ Severance?
An employer’s offer doesn’t establish your full legal entitlement. Non-unionized employees can be owed substantially more than an initial two-week package.
Does Severance Include Bonuses?
Bonuses that form part of regular compensation can be included in termination damages. Enforceable employment and bonus-plan terms affect the calculation.
Can You Negotiate Severance After a Tech Layoff?
Yes. A severance offer can be reviewed and challenged when it falls short of your legal entitlement. Learn how to negotiate a severance package before signing.
Laid Off From a Tech Company? Find Out What You’re Owed
Your technology employer’s first severance offer doesn’t determine your full entitlement. Salary, bonuses, benefits, stock options and RSUs can significantly increase the compensation you’re owed.
The employment lawyers at Samfiru Tumarkin LLP help non-unionized technology employees across Ontario, Alberta and British Columbia review severance packages and recover additional compensation.
Before you sign, always check first.