When you're handed a severance agreement, your first instinct might be to sign and move on. After all, the company is offering you money—shouldn't you just be grateful? Here's what most people don't realize: severance packages are almost always negotiable, and the initial offer is rarely the company's best offer.
In this comprehensive guide, you'll learn exactly how to negotiate a better severance package, with word-for-word scripts, email templates, and strategies that have helped thousands of people secure tens of thousands of dollars in additional compensation.
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1. Why Severance is Negotiable
Companies don't offer severance out of the goodness of their hearts. They offer it because they want something from you—specifically, your signature on a legal release. Understanding this dynamic is the key to successful negotiation.
What the Company Wants From You
- Release of claims: They want you to give up your right to sue for wrongful termination, discrimination, or other issues
- Confidentiality: They don't want you sharing negative information about the company
- Non-disparagement: They want you to agree not to speak negatively about them
- Smooth transition: They may need you to hand off work or train your replacement
- Reputation protection: They want to avoid negative Glassdoor reviews or media attention
Because the company needs these things from you, you have leverage. The severance offer is essentially a payment for signing away your rights and cooperation. If those rights and that cooperation are worth more than the initial offer, you should ask for more.
The Psychology of Negotiation
Most HR departments have authority to offer more than the initial package. The first offer is often at or below the low end of their approved range. They expect negotiation—and they've budgeted for it.
2. What's Negotiable in Your Package
Severance negotiation isn't just about base pay. There are many elements of a package that can be negotiated, sometimes with greater ease than the cash component.
Cash Severance
The baseline severance pay is typically calculated as a number of weeks of salary per year of service. Common formulas include:
- 1-2 weeks per year of service
- Flat minimums (e.g., 8 weeks regardless of tenure)
- Tiered approaches based on level or tenure
Even if there's a "standard formula," exceptions are often made for individual circumstances.
Extended Healthcare (COBRA)
COBRA coverage is extremely expensive—often $1,500-$2,500 per month for family coverage. Ask the company to pay some or all of your COBRA premiums for several months. This can be worth $10,000-$30,000 or more.
Equity Acceleration
If you have unvested stock options or RSUs, negotiate for accelerated vesting. Even partial acceleration (e.g., vesting the next tranche) can be worth significant money at many companies.
Bonus Payout
If your layoff happens before the annual bonus payout, ask for a prorated bonus based on your performance and tenure. You earned that bonus; the timing of the layoff shouldn't take it from you.
Outplacement Services
Professional career coaching and job placement services typically cost $5,000-$15,000. Many companies will add this to packages when asked—it costs them less than cash and looks good.
Reference Guarantee
Get a written agreement about what the company will say when contacted for references. This is often overlooked but incredibly valuable for your job search.
Non-Compete Modification
If your agreement includes a non-compete clause, negotiate to shorten, narrow, or eliminate it. A restrictive non-compete can severely limit your job options.
| Component | Typical Value | Negotiability |
|---|---|---|
| Additional severance weeks | $5,000-$50,000+ | High |
| COBRA payment (6 months) | $9,000-$15,000 | Very High |
| Equity acceleration | $10,000-$100,000+ | Medium |
| Prorated bonus | $5,000-$50,000 | High |
| Outplacement services | $5,000-$15,000 | Very High |
| Non-compete modification | Priceless (job flexibility) | Medium |
3. Preparing Your Negotiation Strategy
Successful negotiation requires preparation. Before you ask for anything, build your case.
Document Your Value
Gather evidence of your contributions:
- Recent performance reviews
- Awards or recognition received
- Projects you led and their outcomes
- Revenue you generated or costs you saved
- Teams you built or people you mentored
Research Market Standards
Know what's typical for your industry and level:
- Check Glassdoor and Blind for company-specific severance data
- Talk to colleagues who have been laid off (if possible)
- Consult with an employment attorney for perspective
- Review our company-specific guides for benchmarks
Identify Your Leverage
Consider what gives you negotiating power:
- Long tenure: More years = more institutional knowledge
- Specialized knowledge: Are you the only one who knows certain systems?
- Client relationships: Do key clients rely on you?
- Transition value: Can you help with knowledge transfer?
- Potential claims: Were there any discrimination or retaliation issues?
Know Your Timeline
You typically have 21 days to review a severance agreement (45 days if you're over 40, per the OWBPA). Use this time. There's no benefit to signing quickly, and the deadline gives you leverage to negotiate.
4. Word-for-Word Negotiation Scripts
Here are proven scripts you can adapt for your situation. The key is to be professional, specific, and confident.
The Opening Ask
Asking for More Severance
Healthcare Continuation
Equity Acceleration
When They Push Back
5. Email Templates That Work
Sometimes negotiations happen over email. Here are templates you can use.
Dear [HR Contact/Manager],
Thank you for the meeting on [date] and for providing the severance agreement for my review. I've had a chance to look it over carefully.
Before signing, I'd like to discuss a few items:
1. Severance Duration: Given my [X years] of tenure and consistent high performance, I'm requesting [X+4] weeks rather than the offered [X] weeks.
2. Healthcare: I'm requesting [6 months] of company-paid COBRA coverage to ensure my family has continuous healthcare during my transition.
3. Bonus: As my departure is occurring before the annual bonus payout, I'm requesting a prorated bonus based on my performance this year.
I believe these adjustments are reasonable given my contributions to [Company] over the past [X] years. I remain committed to a professional transition and am happy to discuss these points at your convenience.
Thank you for considering my requests.
Best regards,
[Your Name]
6. Mistakes to Avoid
Signing Too Quickly
The biggest mistake is signing immediately. Companies may pressure you to sign quickly—resist this. Use your full review period. The package will still be there tomorrow.
Getting Emotional
It's natural to feel angry, hurt, or scared. But emotional outbursts during negotiation work against you. Stay calm, professional, and focused on facts. Vent to friends and family, not to HR.
Not Asking at All
Many people assume "they won't negotiate" without even trying. The worst they can say is no, and you've lost nothing. But many times, they say yes—especially to easy asks like COBRA coverage or outplacement.
Accepting the First Counter
If they improve the offer after your initial ask, consider whether to push further. The first counter often isn't their best either. You can accept or counter again.
Burning Bridges
Even if you're frustrated, maintain professionalism. You may need references from these people. The industry is smaller than you think.
7. Industry Severance Benchmarks
Understanding what's typical in your industry helps you know what's reasonable to ask for.
| Industry | Typical Severance | Additional Benefits |
|---|---|---|
| Big Tech (FAANG) | 4-6 months | Extended healthcare, equity acceleration, outplacement |
| Finance/Banking | 4-16 weeks | Prorated bonus, deferred compensation payout |
| Startups | 2-4 weeks | Equity provisions vary widely |
| Consulting | 4-12 weeks | Often includes career transition support |
| Manufacturing | 2-8 weeks | WARN Act notice may apply |
| Retail/Hospitality | 1-4 weeks | Limited additional benefits typically |
For company-specific information, check our company layoff guides.
8. When to Hire a Lawyer
While many negotiations don't require legal help, sometimes an employment attorney is worth the investment.
Consider Hiring an Attorney If:
- Package is substantial: $50,000+ in value warrants professional review
- Discrimination suspected: If you believe the layoff was discriminatory
- Complex equity: Significant stock options or deferred compensation
- Broad non-compete: Clauses that could limit your career options
- Unusual terms: Anything that seems out of the ordinary
- Large employer: Big companies often have more room to negotiate
What an Attorney Can Do
- Review the agreement for problematic terms
- Advise on what's negotiable and realistic
- Identify potential legal claims you may have
- Negotiate on your behalf (though this can escalate things)
- Ensure the final agreement protects your interests
Attorney Fees
Employment attorneys typically charge $300-$600 per hour. A basic review might cost $500-$1,000. If they negotiate on your behalf, expect $2,000-$5,000+. Compare this to the potential increase in your package.
9. Special Situations
If You're Over 40
The Older Workers Benefit Protection Act (OWBPA) gives you extra protections:
- 45 days to review (instead of 21)
- 7 days to revoke after signing
- The agreement must specifically reference the ADEA
- You must be advised to consult an attorney
If It's a Mass Layoff
The WARN Act requires 60 days notice for layoffs of 100+ employees. If proper notice wasn't given, you may be entitled to 60 days of additional pay.
If You Have Potential Legal Claims
If you believe you were discriminated against or that the layoff was retaliatory, this significantly increases your leverage. Consult an attorney before signing anything.
If You're Being Asked to Train Your Replacement
This gives you additional leverage. Your cooperation has value. Negotiate for extra severance in exchange for training and knowledge transfer.
10. Final Package Review
Before signing, ensure your agreement includes:
- Clear payment terms: Amount, timing, and method of payment
- Healthcare details: COBRA information and any company contribution
- Equity treatment: What happens to unvested shares
- Reference agreement: What the company will say
- Non-disparagement: This should be mutual
- Non-compete scope: As narrow as possible
- Claims release: Know what you're giving up
- Everything in writing: No side verbal agreements
Get the Complete Severance Negotiation Playbook
Word-for-word scripts, email templates, and industry benchmarks to maximize your severance package.
Download the PlaybookFinal Thoughts
Negotiating your severance isn't greedy—it's smart. The company has lawyers and HR professionals looking out for their interests. You should advocate for yours. With the right preparation and approach, you can potentially add thousands of dollars to your package while maintaining professional relationships.
Remember: the worst they can say is no. But more often than not, they'll say yes to at least some of your requests. You owe it to yourself and your family to ask.