I am / was an early employee at a now valuable company. My initial grant was still vesting. I was informed I was let go in a layoff, though the rest of my team or organization was not impacted. I was well-liked and had no performance issues. Another employee in my situation was also laid off. What are the chances we were selected not because of any of the stated reasons such as restructuring, but instead because our remaining equity grant was more valuable than the company wanted to pay out? What questions should I be asking?
Ask HN: What are the chances layoffs were pretext to end expensive early grants?
1–9 of 9 posts
Re: Ask HN: What are the chances layoffs were pretext to end expensive early grants?
#2I'm guessing your employment was at-will, and if so your employer has the right to terminate you for any or no reason.
There are some exceptions, including various forms of unlawful discrimination, which would warrant a convo with an employment attorney.
There's also the possibility of pro-rata equity (or cash) payout if you happened to be between two vesting periods. If they didn't give this to you, you might request it before signing your separation agreement, which is one final moment you have a little bit of leverage.
Re: Ask HN: What are the chances layoffs were pretext to end expensive early grants?
#3I'm guessing your employment was at-will, and if so your employer has the right to terminate you for any or no reason. There are some exceptions, including various forms of unlawful discrimination, which would warrant a convo with an employment attorney. There's also the possibility of pro-rata equity (or cash) payout if you happened to be between two vesting periods. If they didn't give this to you, you might reques…
Thank you for your advice. I am indeed an at-will employee and agree it gives my employer considerable latitude to terminate employment. I am most interested in whether this is a type of outcome which actually occurs in the industry, since that would radically change my assessment of startup compensation. I would basically never work for one again, since my opportunity cost is considerable, and I have no control over getting stiffed in the unlikely event I work at a successful company.
Re: Ask HN: What are the chances layoffs were pretext to end expensive early grants?
#4Maybe it was, maybe it wasn't. As should be expected, you lost the lottery. Employees getting rich from startup equity is dependent on a number of low probability events happening and the remaining employees will most likely not be millionaires anytime soon.
You should just move on, in my opinion.
Re: Ask HN: What are the chances layoffs were pretext to end expensive early grants?
#5Maybe it was, maybe it wasn't. As should be expected, you lost the lottery. Employees getting rich from startup equity is dependent on a number of low probability events happening and the remaining employees will most likely not be millionaires anytime soon. You should just move on, in my opinion.
At anything like recent valuations, I will have done quite well, but if this kind of tomfoolery is really part of the game then it needs to be much more well known among prospective employees.
Re: Ask HN: What are the chances layoffs were pretext to end expensive early grants?
#6I never count unvested stocks into ToC, guess I don't have high expectations about those.
Re: Ask HN: What are the chances layoffs were pretext to end expensive early grants?
#7I'm guessing your employment was at-will, and if so your employer has the right to terminate you for any or no reason. There are some exceptions, including various forms of unlawful discrimination, which would warrant a convo with an employment attorney. There's also the possibility of pro-rata equity (or cash) payout if you happened to be between two vesting periods. If they didn't give this to you, you might reques…
Thank you for your advice. I am indeed an at-will employee and agree it gives my employer considerable latitude to terminate employment. I am most interested in whether this is a type of outcome which actually occurs in the industry, since that would radically change my assessment of startup compensation. I would basically never work for one again, since my opportunity cost is considerable, and I have no control over…
I think these are reasonable concerns and I'm mostly of the same mind. If I'm doing startup stuff it's either as a consultant or founder.
Re: Ask HN: What are the chances layoffs were pretext to end expensive early grants?
#8I haven’t heard of this but it makes sense. It’s possible they did a comp/output comparison and saw that you could be replaced for much cheaper.
Pretty crappy way to do it, I’d love to hear if others have similar experiences
Re: Ask HN: What are the chances layoffs were pretext to end expensive early grants?
#9I haven’t heard of this but it makes sense. It’s possible they did a comp/output comparison and saw that you could be replaced for much cheaper. Pretty crappy way to do it, I’d love to hear if others have similar experiences
Yeah that’s the exercise I fear they did, especially if management believes they have more recruiting leverage now than before due to slowdowns in hiring.