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Citing revenue declines, Airbnb cuts 25% of workforce (techcrunch.com)
791 points by dancric 32 days ago | hide | past | web | favorite | 901 comments



Separated employees will receive 14 weeks of pay, and one more week for each year served at the company (rounding partial years up). The firm is also dropping its one-year equity cliff so that employees who are laid off with under 12 months of tenure can buy their vested options; Airbnb will also provide 12 months of health insurance through COBRA in the United States, and health care coverage through 2020 in the rest of the world.

That strikes me as a pretty generous severance package.


At first I misread this as 14 days and was wondering why everyone is calling this such a "lavish" severance. Now I get it.


Somehow 14 weeks also seems less than 3 1/3 months, even though they’re the same.


And slight more that a quarter of a year seems more to me again...


But those all seem pale next to 98 days.


I get paid monthly and have a yearly salary so three and a half months or slightly over a quarter of a year are durations I can more easily convert to an idea of money (or time), which I think is the point. If I hear 14 weeks or 98 days I can’t easily (ie naturally) convert it into terms I can think about.


if numbers sway one like this, pre-ipo company is not the place one want to be


They aren't the same. 1 month is not 4 weeks. 1 month, on average is 4.348 weeks, so 14 weeks is actually 3.22 months.


I first misread it as "14 months" (as usually you count in months), but it was way out of bounds.


Not way out.

I was at a company in the UK where a department closed. They offered 3 months, plus a month per year served. And for first round they offered a 6 month bonus for volunteers vs stay and try to get an internal transfer.

I was surprised how few volunteers there were. I don't think I've had a job I wouldn't walk from for a years pay. Those that were chopped second round were pissed.


Iirc a German friend got more than 12 months severance for a lay-off in SAP. It’s interesting to Compare differences in norms around the world.


The US workers, at least in IT make much more money than their European counterparts, while paying less taxes. A wise person could in theory save 20% or more every month to create own safety net, while still enjoying a high standard of living. Alas this is not the American way of life, where it is not uncommon to spend even over 100K per year on a lavish lifestyle and living in debt.


But if you save up for your own safety net, you might get very high bills if you get one of the sicknesses that are not covered by the insurance. Either you depend on society or the market. Both have their problems.


That is a tradeoff. Also most lower paid workers in the US don’t have the luxury to save money at all.


How could Europeans move to the US?

Apply to a position and hope to be moved over with a L1 visa?


Few options.

Find an employer who is willing to hire you and go through H1B visa lottery, which is the normal work visa.

Enroll in a US university, ideally a STEM degree, and use the OPT visa extension to get a foothold in the US.

Marry an American?

Probably plenty more options, but I'm not an expert in US immigration.


Join a company based in the US (like many tech companies), and do a really good job. They will then start trying to get you to move to the US, under an L1/L2 (if you can handle management, L2 tends to be better as your partner/spouse can work).

Immediately apply for a green card.

Preferably be born in a small European country, so the green card comes in your lifetime.


So looks like it's not too easy, which means salaries will not get better in Europe anytime soon.


Meh, it's not impossible. You probably need to move to Ireland or the UK though, as that's where most of the larger tech companies have most of their roles.


Invest 500k+ in the US to get the investor visa.


From what I've seen 12 months pay in Germany is probably equivalent to 3.5 months pay in the US.


Pardon my frankness but that's BS.

What are you referring to here? How much money buys you? Aka: costs of living?

How much you make, converting EUR to USD?

What industry? IT?

I worked in a leadership position at a multi-national in Berlin for almost five years. I know the salaries the engineers had in CA & Chicago vs Germany. US was maybe 20% more max. In terms of what it buys you ... not so much. See below.

Cost of living in Munich (one of Germany's most expensive cities) vs. SF.[1] And then Berlin (one of Germany's cheapest cities) vs. SF.[2]

[1] https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...

[2] https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...


They're referring to specifically the tech industry. Which is, most assuredly, higher paid in California than anywhere else around the globe (in the mean, there are obvious exceptions).

This comes from a person with EU citizenship who has shopped jobs/interviewed in multiple major cities in Europe; including Munich, Berlin, Amsterdam, London, Dublin and Prague.

It's not insignificant. We're talking 150-220k USD/yr in LA vs 75-95k EUR/yr in Amsterdam (as an example, since it paid the greatest during my search) for a similar seniority role. That's before accounting for nominal tax differences (~37% LA vs ~38-42% AMS; which is significant at that delta).

When I reviewed housing, Amsterdam wasn't significantly cheaper than LA, but it varied wildly based on where you wanted to live in both cities. LA apartments: 1200-4000USD, AMS Apartments: 930-3500EUR. The major plus in AMS being that you could live further from City Center and still reliably account for public transit. There's medical: free in AMS, $38/mo where I opted to work in LA. There's vacation time: 20-24days in AMS, flextime at my company. Etc.

I mean, there are more comparisons to be made; but those were the prime metrics I was interested in.


> AMS Apartments: 930-3500EUR

Wait what?! What kind of apartments are we talking about here?

> $38/mo where I opted to work in LA

What does the medical insurance cover?

How much did your car & car insurance cost in LA and did you need one in Amsterdam (probably not)?


> Wait what?! What kind of apartments are we talking about here?

All of them, that was the range from the cheapest to the priciest. Idk why that seems unbelievable, I literally just looked at apartments in AMS now and the range appears the same.

> What does the medical insurance cover?

It’s full medical coverage via a PPO plan. $40 copay, $250 deductible, $1500 max out-of-pocket per year.

> How much did your car & car insurance cost in LA and did you need one in Amsterdam (probably not)?

I already owned a car, and would have sold it if I moved. Insurance is paid semi-annually but isn’t a major expense. Additionally, I included public transit as a benefit for Amsterdam in my original post, so I’m not sure what your point is.

It really seems like you’re grasping at straws to justify the difference. The reasoning is obvious: the tech industry is massive, highly competitive and California is currently the global leader in that industry.


Sorry to break the news for you, but German salaries are 50% of US salaries (US salaries may vary by location). My first offer on the cost as my first job was 160k USD. In Germany they were backing out in Munich if I asked for 60k EUR.

"Cost of living in Munich (one of Germany's most expensive cities) vs. SF.[1] And then Berlin (one of Germany's cheapest cities) vs. SF.[2]" I think these numbers are outdated. Especially Berlins rental and real estate costs are catching up quickly.


Berlin rental costs are capped by law from some time ago, and the numbers are actual.


The point still stands. Rental caps mean it is very difficult to find a place to live in desired neighborhoods. Of course, you can find places outside the ring, but those would have been cheaper anyway!

That’s not to say it isn’t sensible social policy. It is less disruptive to people who have lived there for a long time. But if you move for work, you will have to either pay a lot more than you would have in 2011, or get lucky.


I would hold that the better social policy is capping the cost of rent by allowing the construction of competitive housing stock. Either alternative is quite harmful: new housing is unattainable, either by defect of price or availability.


Yeah, rent caps worked out in Lisbon extremely well. Not.


Depends on whether you mean, "there exists someone who pays this", or whether you mean, "as someone looking for housing, you can expect to get the housing, and pay this much." (The part where you can actually obtain this rental falls apart entirely.)


Try to buy


It’s worth making 4x in the states and paying less taxes to boot. Forget cost of living, only rent is more expensive so tack on an extra $2k a month if you don’t want to live with roommates.


> Forget cost of living

You can forget it when you are young, healthy and single.

Put a wife and couple of kids into the equation, a sickness here and there plus a small risk to become unemployed and everything changes.


While you are young and healthy sure, but if something happens to you or when you get older, not so much.


Why not? Can't you purchase the same insurance, protections and care with 4x earnings and lower taxes?


Well for one you might but it will be incredibly expensive and probably still cover less than in the Netherlands.

Also, the cost means that it is something you can only afford while you are still working.

So if you do get hurt and can't work or get fired you lose that privilege.

That is also a cost of opportunity that you lose by living in the US and that is not factored into the price of the insurance directly.


You don't have to keep working. Workers compensation, life insurance, long-term care policies all exist.

There's really not much different in what's available, only who's responsible for it. In America, you earn and keep more and it's up to you to allocate properly (or not). In other countries, the government does it all for you to ensure there's a base level of support for everyone.


It's not a question of availability it's a question of price.

If you need to pay for a very expensive medical insurance then you can only afford it while employed which you won't be if you have health issues that prevent you from doing so or get fired.


That is not how it works at all. America has both public funded (federal Medicare, state-level benefits, etc) and private insurance (either personal or group policies through your employer).

There are plenty of choices for continued care and coverage, as long as you plan for it. That's the major difference. It requires you to actively plan for your retirement and old age. Other countries just do that for you in exchange for a heavy tax.


This US healthcare meme is tiring and uninformed. A small minority have financial hardships due to medical emergencies here, and they for the most part aren’t poor, who get healthcare for free.


Cars are also vastly more expensive and so is medical insurance.


Cars are NOT more expensive, especially not after you factor in the obscene cost of fuel in the EU.

Healthcare is free at the vast majority of tech companies in the US.


I assumed what was meant was how generous it was compared to a normal severance package in the country. Ie, if a normal package would be 2 months in the US and this is 3.5, then saying it's like a 12 month package in Germany implies that a normal German package would be just under 7 months.


If you compare SF to any german city it may be that way, but the median salary (not only IT) is not that different(56k$ to 46k€ according to google).

Remember that there are people outside IT/SV!


I can get a remote job working from anywhere in the US that pays me double what anyone will pay me in Germany (or anywhere else in the EU).

I look frequently, because if the pay was equal (or even 3/4) I'd love to live in Europe.


googling Silicon Valley programmer wages I got https://www.glassdoor.com/Salaries/san-jose-computer-program...

Which basically the average Silicon valley wage is the wage I am making now. However that is with quite a bit of seniority, I've noticed offers from Germany are generally lower than what I make but Germany costs less. If I were starting out right now I would probably make 60% of what I make now.

My guesstimate of the difference has always been that a years pay in Denmark was equivalent to 8 months pay in the better paid parts of the U.S.


Those wages are severely off. Glassdoor is no longer used in the United States to research wages for tech. An average engineer at a top tech company makes well over 250k USD per annum.


What does that even mean? Are you talking about buying power? How much you lose on taxes? You make it sound like Germany is a low wage country. Their minimum wage is around 9 euros, versus 7 dollars in the US, no?


The Federal minimum wage is a useless metric. California's minimum wage is $12 (and higher, in some counties) and is set to increase to $15/hr by 2022 (assuming COVID doesn't have some major echoing effects).

Also, they're referring to white collar tech employees. All salaried, all well above minimum wage and most definitively the highest paid (in that industry) in the world, including outside of SF/the Bay.


there are also regulatory requirements at play in different countries that can make it much harder to fire people (and causes unemployment in the end because companies will think twice before hiring, too).


It would also mean SAP in Germany hires less frequently and in less numbers.


really? i've always counted weeks, since every week is the same lenght (and paid fortnights, since every fortnight has the same lenght). i get paid by the month now and it's super weird to me, as if i'm worth more in february than in march.


Weekly or fortnightly pay is common in Australia, so talking about it as weeks of pay made sense to me. I don't think they really even use the term "fortnight" in the US. Every tech company I've worked at here seems to do the 15th and 30th which is still strange to me.


It's true, I have colleagues point out how odd my usage of fortnight is in presentations, meetings, etc. Had no idea that was a difference until I moved stateside.


Larger companies tend to prefer weekly/biweekly as you don't get that month-length variance. On the other hand, many employees don't like it as much because their biggest bills tend to be paid monthly so they'd prefer their paychecks to be aligned.


I've seen both and as an employee the semi-monthly is the best - it's about biweekly but you don't have to wonder why some months you only see 2 paycheck vs. 3. Predictable is really good.

From a company standpoint, not having to accrue the liability on the ledger simplifies the accounting auditability & ability to close your books monthly.


I've had it both ways, and prefer it biweekly. That way, I can build my budget based on 2 pay periods, and have the occasional 3rd paycheck in a month go immediately toward savings.


Biweekly is easier for the employee, semimonthly is easier for bookkeeping.


I've had it biweekly including in my first "tech" job. I made enough that paying bills wasn't really an issue and having the "extra" paycheck for savings seemed almost like free money towards savings/paying off loans.

On the other hand, I understand people who are on tighter budgets who would rather have their revenue better aligned with their expenses rather than having to balance them on their own.


Same for me. It feels like getting a bonus two months a year.


That works for people who build savings.


It's really strange to me that companies in the US can just determine how much severance they're "willing" to pay. Why is it even up to them?


Labor day is celebrated on May 1st around the world in honor of the events of the Haymarket Affair, where the Chicago police attacked striking workers. But in the US it is celebrated at the end of summer. This is not an accident, and is directly connected to your question.


Never realised that, great way to make a country forget its history.


I am not sure why you are being downvoted.

It seems that much of HN has very little knowledge of (and interest in) business operations and employment law in other countries.

I see your question as genuinely inquiring about this stark difference from what is common in Europe and other countries.


I didn't downvote the OP but I am picking up a tone of indignation that I don't quite understand. I find this pretty interesting.

Here is my take on the situation:

Let's say I own a widget factory and you are highly skilled at turning paper clips into widgets. We agree on a price for your time and I hire you to start making widgets. Things are going gangbusters, you produce a ton of widgets and I pay you for the time you spend working for me. All of a sudden people stop buying widgets. I no longer need your services so I have you stop coming in and stop paying you for your time.

I don't understand why I should be obligated to pay you for services you didn't provide. It's not like I can go to my customers and ask them to pay me for widgets I didn't sell them.


You own a factory. Your employees don't. There's a power imbalance in the employment relationship.

Most people (who don't own things like factories) need a regular, predictable, stable income to survive, and finding new employment is not always easy.

Therefore, people in most developed countries have agreed that by taking on an employee, it is contingent on the employer to provide some guarantee of stability. This is borne out by laws restricting firing in many cases, and requiring severance pay in the event.

The USA is an aberration in this regard - even the workers seem to value the rights of the employers far above the rights of the employees. I'm not sure why this is.


In return for these employee benefits, the employees make less money, and are less likely to be hired, since every mis-hire is a potentially fatal error for the business. The laws of economics are not magic and the costs have to go somewhere.


I hear this claim often enough, but never seen related studies.

Is getting hired in Germany more difficult, compared to the USA? And if so, can you attribute that to employee benefits?


Is there a reason why risky, innovative startups tend to be formed here in the US, and not in Germany?

You guys act like there's no downside to cradle-to-grave nannying of the labor force. There is.


Cost and availability of capital, rather than anything else.

Like, if you are a PM at FAANG you can probably get a seed round for any kind of nonsense in SF, but in Germany you would need far more proof and preferably revenue (I don't know Germany that well, but it's similar across much of Western Europe).


Why is there most capital available in America? Why would investors choose to go there if businesses were not easier to start, grow and exit?


Because the dollar is the world reserve currency, and lots and lots of large pension funds, university endowments and family offices spend tiny proportions of their assets on VC (as it's expected to be uncorrelated with market returns).

VC's tend to be look a person in the eye and judge his (almost always) character. They don't like travelling, so most of their investments are made in the Bay Area.

Coupled to this, there's much more availability of angel funding because of the previous unicorns (paypal, eBay, Google, Facebook et al) so it's easier to get started.

There are definitely some cultural issues at play also, but fundamentally the reason that the US has such a high proportion of tech giants (which seems to be what you're focusing on) is the low cost of capital caused by the dollar's exorbitant privilege.


You realize other countries have VCs too right? Yet hundreds of foreign billions still go to America because it's a better environment for innovation and produces bigger and more impactful companies. Your 3rd point even relies on it.


Venture capital by selected countries: https://www.statista.com/statistics/1071105/value-of-investm...

Note that it's per capita, and Israel has a population of 8mn, versus the US's 330mn.

I think it's pretty clear that most VC funding is given in the USA.

And note that the terms are often much better, and funding is accessible earlier. This article explicity states that you want to get seed funding in the US if you want to maximise your valuation. See: https://medium.com/sosv-accelerator-vc/what-does-seed-fundin...


Yes but these companies also largely exist because you have a deregulated market whereas the European Union is a much more regulated market.

These regulations provide for worker rights, productions and consumption safety, product quality and much more. Something America is lacking in completely.

You also have a government and department of defense that helps a lot of your big multinationals grow and kill it's foreign competitors.

You can look at the acquisition of Alstom by General Eletric as a good example.


Well that's the point. US has lower regulations and more fluid employment which leads to bigger and more innovative companies. America isn't as nationally protectionist as China though, although that will now change with this pandemic.


America is very protectionist actually.

And what you call fluid employment I call bad jobs.


And what you call fluid employment I call bad jobs.

I guess that explains why people do whatever they can to migrate from the US to your country.

They do that, right?


Correlation and causation. If you claim that lesser employee protection causes more innovation, proof it. So far, this is merely a believe.


Are you sure the burden of proof isn't yours? You're making an unlikely claim, if not an extraordinary one.

If I shoot someone and they fall down dead, is "b....b....but correlation isn't causation!" a valid defense?


I think that just speaks volumes of your cultural bias.

For me, it is quit natural to assume that a base level of employee protection causes innovation. And Germany would be a good example, as there are quit some innovative small to medium sized companies. The only thing lacking is tech unicorns and there are all sorts of reasons for this.


The proof are the many valuable American companies making world-changing products used globally and constantly copied by many other nations with their own domestic clones.


That is not a proof for the question. You seem invested in your believes and either don't know or care about scientific evidence to back them up.

There is nothing more to gain here, have a good day.


Valuations, revenues, and revolutionary products are quite real. What would be proof of the contrary? What form of proof are you even looking for?


What is missing is a causal link between lesser employee rights and those values.

I could claim that the historic position of the USA after WW2 caused all of these. My claim would be as baseless as yours. A good starting point for research, but nothing more.


> even the workers seem to value the rights of the employers far above the rights of the employees. I'm not sure why this is.

To paraphrase a famous quote, in the USA the workers don't see themselves as workers, but as temporarily down-on-their-luck owners.


That quote by Ronald Wright is actually paraphrasing part of a John Steinbeck book, where he's using it to describe people who wanted socialist governments, but were dissapointed that everyone ended up poor instead of a utopia where everyone has everything they need.

It's funny how it started out as a criticism of people who think that the government should have more control of how businesses operate, but has been paraphrased so many times that it's now used as a way to criticise people who want to minimize government involvement in business.


>To paraphrase a famous quote, in the USA the workers don't see themselves as workers, but as temporarily down-on-their-luck owners.

It's hilarious applying it here, given the situation described was reversed. Your position is that the worker who doesn't own the factory should dictate what the factory owner should pay because of a power imbalance.

Weird.

Perhaps the issue is having difficulty telling the difference between workers and factory owners in general.


Out of curiosity, what is the quote and whom is it by? (not trying to challenge you, just interested)


> “Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.”

By Ronald Wright.


> You own a factory. Your employees don't. There's a power imbalance in the employment relationship.

You make it sound like employers are all fat rich people smoking cigars while everyone else is in a sweatshop. The reality is that 99% of businesses are very small in size (as in, one owner and very few employees) and it's often much more a partnership than the power imbalance you are talking about. Yet the same laws apply whether you deal with a 10 persons company of a 100000 persons one.

https://www.oberlo.com/blog/small-business-statistics


There's often (though not always) some size cutoffs in various benefit requirements for small businesses to relax the rules a bit. Such as 50 employees for the ACA I believe.

But I agree, people act like the economy is nothing but fortune 500 megacorps and push for laws that make it harder for everyone to survive except for such businesses and their employees.

And people always miss the hidden cost, even when talking about the fatcats. If you require companies to provide a year of severance, then everyone just gets paid (n-1)/n as much on average, where n is the average number of years an employee is expected to stay.


I've heard the difference between European safety nets/regulations and US systems described as "freedom to" vs "freedom from". If we accept your premise, that the hidden cost of regulating severance is a decline in salary, this fits the above difference. In the US, you have the "freedom to" be as irresponsible as you want, living at or beyond your means, but if you're laid off, you bear the responsibility of dealing with the consequences. In Europe, you have the "freedom from" having to worry about that situation, since the safety net will provide some time for you to get back on your feet, and the price was a lower salary (in effect, forced savings).


More Americans work for large employers than small or mid-sized ones.


Is this stat still up to date? It changes drastically between booms and recessions. In some years small businesses have had far more employees. A fact which should affect policymaking as much as the ratio at any given point.

Either way I'd expect fewer americans still work at large businesses than at small and mid-sized businesses combined.


Not by a big margin. Around 47% of the workforce is employed by small businesses.


So that's a minority.

And "small businesses" with fewer than 500 employees represent 99.7% of all businesses and yet they represent less than half the total workforce.


The issue of course is that more regulation makes it that much harder for small business to hire and over time forces more and more of the economy and the labor force into the arms of big business.


That's 10s of millions of small companies hiring half the people. The point being there's plenty of people in America becoming "owners of the factory".


Your small companies hire up to 500 people which is nowhere small.

Also, it's not because a company is small that the owners are small time business people. The owners might be independently wealthy.


Why don't you look at the actual data: Firms with fewer than 100 workers accounted for 98.2 percent, and firms with fewer than 20 workers made up 89.0 percent. [1] The vast majority are small companies with single-digit employee counts. Add in independent contractors and it's even more skewed.

Being an entrepreneur means getting things done with what you have. You don't need to be wealth and instantly go from 0 to 1000 employees. Most people start with modest means and build up from there.

1. https://sbecouncil.org/about-us/facts-and-data/


Wrong. 80,5% of all SMEs don't employ anyone (nonemployer firms).

So not only do most Americans do work for multinational companies (53%) but on top of that, 80,5% of the ones working in SMEs are themselves the owners and don't have any employees to speak of.

Which leaves a whopping 19.5% of American SMEs which actually employ workers.

So you're dead wrong.

cf: https://www.sba.gov/sites/default/files/advocacy/2018-Small-...


Nobody is stopping you from owning a factory. The workers are also free to leave anytime without any notice or responsibility to the employer. This is a flexible arrangement for both parties that focuses on individual freedom and responsibility.

It also helps make it easy for entrepreneurs to start companies and create jobs in the US and is a direct reason why we don't see the same innovation in regulation-heavy regions.


Sweden and Germany, for example, are heavily regulated but have more innovation in terms of GDP% than the USA.

If you're talking about why we don't see more visible commercial innovation from European countries then it's more about access to the enormous amounts of capital to build a big name startup like Uber etc.

Nobody notices the legions of small bootstrapped or seed to profitable software businesses across the EU.


How do you measure "innovation in terms of GDP"? I certainly don't see trillion-dollar world-changing companies like Google, Microsoft, Apple and Amazon coming from those regions. What small business could replicate the impact of Windows, or Gmail or the iPhone?


It's worth noting that those companies have trillion dollar stock valuation, but by far less actual revenue. Average revenue per year of these companies is "just" 159 billions. Amazon has had a revenue of 88 billion.

German companies with more revenue than Amazon: Volkswagen, Daimler, BMW, Allianz, Siemens, Deutsche Telekom, Uniper, Bosch.

On the smaller end, Germany also has a comparable number of employer firms per capita as the U.S.

Empirically it largely is a myth that worker protection and consumer protection stiffles enterprises or innovation.


Amazon 2019 revenue is $280B, which is greater than every company you listed and tied with Volkswagen.

Valuation reflects market sentiment and potential but perhaps I should have left it out. The real focus is the "world-changing" aspect of the products produced.

What have been the recent global innovations produced by those German companies? Anything turned into a household name?


You're correct regarding Amazon's revenue, I somehow got the 2014 data, sorry.

I'm actually not quite sure what you mean with the "global innovations" part, though, could you expand on that? What is it that makes e.g. Microsoft innovative?

What I see is the your big four all sell consumer product/ services and thus are more visible. E.G. Bosch is developing electric powertrain components, produces radar/lidar and video sensors for autonomous driving. Bosch also produces the robots used in those mostly-automated factories.


Every Apple iPhone and Watch uses Bosch's gyroscope and accelerometer tech. They're also the market leader in smaller EV tech used in electric motorcycles, bikes and scooters. It all goes out to consumers without them knowing. Even Tesla use Bosch parts.

That's why they're called a "hidden champion".


The whole is greater than the sum of the parts. It's what you do with that internal tech that matters.

We've had gyroscopes for a century. The iPhone is innovative because it used that to implement a new device that changed mobile computing.


(not the parent)

I would think that since innovation and growth (caused by innovative use of resources or increase in efficiency or novel products and services) in general should be relative to the population and its state to begin with, nominal GDP growth per annum would be a reasonable metric as a proxy for the wildly non-measurable "innovation in terms of GDP"; for reference, here's the data for 2018:

USA: 2.9% Canada: 1.9%

Sweden: 2.2% Norway: 1.3% Finland: 1.7% Denmark: 2.4%

Germany: 1.5% France: 1.7%

Ireland: 8.2% (not a typo, likely explained by expansion of business services from NA into EU) UK: 1.4%

Portugal: 2.4% Italy: 0.8% Greece: 1.9% Spain: 2.4%


No need to approximate: https://data.oecd.org/rd/gross-domestic-spending-on-r-d.htm

Germany is at 3.4% of GDP spending on R&D and the USA at 2.8% France is also right up there at 2.2%


Spending on research and development is an awful proxy for results delivered by said R&D, which is what we would actually want to measure if we're looking for innovation relative to GDP.


Also highly dependent on the laws of the individual countries as to what counts as R&D spending.


Like the car? Volkswagen is twice the size of Microsoft by revenue.

I'm going with the OECD definition here: https://data.oecd.org/rd/gross-domestic-spending-on-r-d.htm


The car was invented in the 1800s, and has seen mature competitors in many other countries like Japan. In the current century, Tesla is the auto giant leaving behind all the legacy manufacturers while also branching into energy products.

Pivotal products are a better milestone than vague estimates of R&D spending.


There's no doubt about Tesla's ability to bring an innovative product to market but they're not a giant by any measure except valuation.

Little known German company ZF has almost double the revenue of Tesla. They also make the transmission for the Porsche Taycan EV that's outselling the 911.


That is a...wildly imaginative take.

Tesla sales are a fraction of any of the big three in terms of sales or revenue.

They sold 192,000 vehicles in the US in 2019. Each of the Big Three sold well over three million.

Tesla currently loses $2500 on every vehicle they sell


And for the numerically challenged like me who like to see visualizations. First line is 200k and second is 3M

oo

oooooooooooooooooooooooooooooo


This thread is about innovation, not sales.


How are Tesla more innovative than other companies ? They kicked off a big conceptual change but I don't see that they have a significant technological advantage over other companies like Volvo.


>How are Tesla more innovative than other companies ?

People always seem to compare Tesla technology of tomorrow with what its competitors are doing right now. That's why Volvo "only" has level 3 self-driving, while Tesla has a fleet of robotaxis that are earning you money on its ride-sharing app while you sleep.

I joke, but a large portion of the Tesla fan base has no clue what is going on in the autonomous driving or auto manufacturer world outside of Tesla. Tesla has been a big innovator, but they aren't leaders in everything....not even close.


> "Tesla has been a big innovator"

The thread is about innovation, so that's what counts. And what other manufacturer matches what Tesla has driving on the roads today? The closest realistic challenger is the expensive Porsche Taycan which is still missing all the functionality and usability features.


I mean, I get your point, but unless there are enough sales, pretty soon there will be no money for innovation.


I'm not sure announcing products with no capacity to manufacture them should be considered "innovation".


>Tesla is the auto giant leaving behind all the legacy manufacturers while also branching into energy products

Tesla has sub-1% market share in the global auto market and rapidly declining energy product deployment (they deployed 4x more MW 4 years ago than the did last year). Let's not pretend Tesla has taken over anything yet.


How do you measure innovation? American companies are on average far wealthier than companies in Europe and spend more in R&D as a result.


> Nobody is stopping you from owning a factory

Seriously? Should they eat cake as well?

https://en.wikipedia.org/wiki/Let_them_eat_cake


Seriously, who's stopping you? It's ironic to say that on HN when YC has helped launch thousands of companies and several self-made billionaires.

The ability to hire and fire fast is undeniably helpful for companies, and being able to quit and move to new jobs is just as useful for personal career development. It might not be for everyone, but it's not any less valid.


The typical member of the precariat doesn't have the financial means of taking an unpaid sick day. How on earth do you imagine that they have the means of starting their own company?


The discussion was about at-will employment in America. There are pros/cons to both employee and employer, and it is an absolute truth that this arrangement helps companies grow and helps employees eventually start their own companies - as opposed to different regulatory environments.

Adding more regulations will bring equivalent trade-offs because that's the reality of economics. Do you disagree?

If you want to get bogged down in technicalities and anecdotes though, then sure life isn't fair. I worked manual labor before and now own multiple properties. I guess it's just magic.


No one suggested it was magic. What it often is - statistically - is socioeconomics. It’s more or less the single best predictor of outcomes for you and yours.

There are outliers, but we’re talking about broad systemic patterns.

You evidently went to an okay UC - you probably had supportive parents. Be it emotional or financial support. Perhaps both! Perhaps your family life was reasonably stable. Perhaps you had three square meals most of your youth.

The point is that you are in a position to access capital that is markedly different from a lot of individuals born into lower socioeconomics striations in society and the statistics are weighed :heavily: against them.

This is often through no fault of their own.

Thank your lucky stars the world aligned for you as it did. Where and with whom you started that life made a far bigger difference than any perceived grit you might think you exercised.


Let me just go find a cash machine and withdraw the $X million needed to buy me a factory. Nobody’s stopping me!


That's called venture capital, or a loan, or a mortgage; things that millions of others have used to start their own businesses. Happy to make some intro's for you. Let me know.


Loans with no collateral ... right.


Sometimes. Or you give up equity. Or secure it some other way. What's your point? That it's hard to do?


That you can't get a loan when you don't have collateral which is the case when you are not already wealthy.


Then get a job and save up some collateral. That's how many people start. This is really not that complicated.


But that's not always possible when you don't have a good enough job to save which is the reality for a majority of Americans since they live pacheck to paycheck.


All it takes is a small loan of a million dollars.


Sure, because nobody has ever taken a loan to start a business before. And VC funding doesn't exist. And mortgages are a falsehood. And companies are never bootstrapped either.

I guess eventually owning a factory is just impossible right?


Yeah and I could become a rock star if I started playing the guitar.

Getting loans is hard, especially if you're one of the working poor. Starting a company that doesn't die after a few years is harder. When you're one of the 40% of Americans who can't cover an unexpected $400 expense, if you company fails you're fucked. The social safety net in the US is a joke.


Yes, it's a trade-off. Less regulation and more freedom and flexibility at the cost of more social risk and personal responsibility. That's the American way.

I was simply stating that truth, not defending it nor saying other realities can't exist. But there is always a trade-off. What part of that is so controversial?

Perhaps things have changed and the balance needs to be shifted now. That's a great discussion to have, but let's actually have a discussion then.


You meant more freedom for those who are in a powerful enough position to take advantage of it.

That the other side of the coin is misery for those, who have not the means to exercise these freedoms, that is the problem your comments ignore.

There is always theoretical freedom and practical (real) freedom. It is not evident, that the USA offers more freedom to the average person.


It is easier to start and grow a business when there are less regulations around employees. Every employee in America is also free to walk away from their job without any notice. These are both facts and have allowed for vast commercial growth and innovation in America (and in countries with similar setups).

Whether you (can) take advantage is completely orthogonal to the original question of why the USA is "an aberration in this regard", and I would rather not devolve into yet another rehash about fairness and opportunity.


maybe the reason why so many want to start they own business is because u can get fired for no reason. being it's own boss gives you at least the freedom to not always live in fear of being fired if you do something that the company does not want, like getting pregnant, i have read enough stores of companies firing pregnant women and i cannot believe it's legal to happen.

in europe at least that part is gone, you start your own company not out of necessity but out of motivation.


Do you think it's easier to start a company and that is has less risk than just finding another job? Also have you seen the world-leading benefits at places like Google?

America just chooses more freedom than government mandated security. There's some slight trade-off but it is nowhere near as problematic as media makes it seem.


"Just buy your own factory" as a response to the power imbalance between the workers and the owners of the means of production is the controversial statement.


The actual quote is "nobody is stopping you" - because that imbalance means it's easier for you to also own the means of production. It's unequivocally true, and enjoyed by 10s of millions of small business owners and entrepreneurs which form the heart of the American middle class. It answers the why posed by the GP.

But yes, different places are different and life isn't fair. No need to cutoff any discussion of various economic systems and environments for the same basic retorts.


No, the imbalance doesn't make it easier for you to own the means of production at all. On the contrary, it allows for systemic exploitation that makes social mobility harder and increases the wealth imbalance over time.


Depending on your target industry, "a factory" can be as simple as some old yet reliable drill presses and lathes, and then hiring a machinist or two. How is the flexibility to do this "controversial"?

https://youtu.be/xXze8_SzW28?t=431 <---Granted he's got Youtuber money and other gun-sales related money to help, but the concept is the same....he's bootstrapping a factory after purchasing the relevant capital infrastructure using his own money.


> Granted he's got Youtuber money and other gun-sales related money to help

This is the difference. Most Americans don't have access to this capital, or access to means of borrowing this capital, and if they do have the means then they might not necessarily be able to shoulder the risk.


It's not like the capital just fell into his lap from a friendly Wall Street banker. Those businesses are ALSO self-started (to the best of my knowledge), especially his Youtube success. He's a prime example of someone working hard, spending less than they earn, accumulating resources, and then expanding that into ownership of the means of production as well as employing others.

It's not for everyone. Sure, most people have no appetite for the level of risk involved even if they can scrape together the money to buy some revenue-generating asset (I know a guy who left the Marine Corps as a truck driver...moved back to Japan, bought a truck, and then opened a moving company). Most people don't have access to capital....nor will most people ever have the intellect to write tight software code, no matter how many government-backed Code Bootcamp Initiatives there are.

To bring this back to the original point though, telling someone to bootstrap a factory, which is demonstrably doable in the American economy even today (for flexible definitions of "factory"), shouldn't ever be a "controversial" piece of advice. Especially on an pro-entrepreneurship site like YC/HN.


How do you get a big loan without collateral?

VCs might be interested in your app but not in a random bakery which is also a business of a type that is probably more common.

Also VCs take a share which makes them the owner as well but oh well.


You don't. You start small and work you way up while offering whatever collateral you can until you get that big loan. Save up earnings and use a downpayment or buy insurance. That's how business growth works.

There are 10s of millions of business owners in America. Ask any of them how they did it.


I would sincerely love to live in the bubble you do.


It would better to not assume someone's background first.


The total amount of land is relatively fixed on human time scales. Given that, everyone who owns a factory (or any land) does make it more difficult for you to own a factory.


That’s quite a stretch since 95% of the world population lives on 10% of the land. [1] We can also build vertically, and space is a whole new frontier that is seeing lots of interest lately. I don't see this as a serious limitation. Opportunity is endless.

1. https://www.sciencedaily.com/releases/2008/12/081217192745.h...


Oh, I didn’t know you could stack factories on top of each other!


You literally can. Are you being facetious? What's going on with this discussion?


Try to go build your factory on top of an existing factory. I suspect someone will stop you.


Skyscrapers and multistory industrial centers with multiple tenants already exist.

But really? The thing most preventing you from starting a factory today is... because you can't find the land? Alright then.


It’s not about locating land. That’s easy. It’s about controlling the land.


Start by making things where you live right now. In fact that's how many HN users are producing value as we speak.

Finding and controlling land to expand your business is not a serious limiting issue. You have effectively infinite headroom before you need to worry that you can't own a factory on Earth because too many other factories already exist.


I understand the policy and I don't think it is an entirely unreasonable way to combat wealth inequality. The only point I was trying to make is that it feels disingenuous to be surprised a company has a say in the severance they pay.

I do think there are a few places where this policy breaks down. For example, the additional transaction cost makes hiring decisions "stickier." I think this hurts the employee as well as the employer.

I don't quite understand the power imbalance here. My employer requires my labor and I am willing to trade my labor for money. If I'm not happy with the arrangement I'm free to find someone else to trade with.


> I don't quite understand the power imbalance here

There's only a power imbalance if workers are prevented from organizing, or if they (for whatever reason) refuse to organize. Or if they workers are very easily replaceable.

Obviously, if you're one of 200 workers, you can't negotiate evenly with the ownership as 1/200th of the company's workforce. Same goes if you're an unskilled worker who is easy to replace. However, even then, if you organize with all 200 of your co-workers, you are closer to a balance in negotiating power since it would be hard for said company to replace all 200 workers at once.


I consider this a downside, it makes it harder to become factory owner.

You want to balance the power? Make it easier to be an employer, not hinder it.


Here in Sweden we don't see it as making things harder for employers, but making them act in fairness.

Swedish worker unions sees the success of the business as success of the employees and will help get there for example by fair to both sides collective agreements.

This means for example that unreasonable demands from employees will be blocked, and if the employer needs to cut down employees cannot refuse.


But there is no inherent reason the business itself is the locus of responsibility to the worker (other than obvious things like worker safety on the job.)

Why not, for instance, make the loss of a job be covered by saved union funds that are generated by the union as a whole? The only reason the business is tagged as the responsible party in Europe is historical cruft.


> The USA is an aberration in this regard - even the workers seem to value the rights of the employers far above the rights of the employees.

No one has a right to payment if they do not provide services.


If it's specified in their employment contract, they absolutely do. A severance package is really at the root of it just something laid out in an employment contract that says that absent cause, an employer needs to compensate the employee for terminating the contract. Clauses like that are super common in all kinds of contracts.

The main difference, of course, is that in countries that require this sort of thing, it's required - but requiring certain implicit terms in employment contracts is a regular thing in the U.S. as well - there's all kinds of regulations and case law on what sorts of employment contracts are valid. Saying that something like severance is a necessary requirement is a difference of degree, not of kind.


if you need to get the other party to sign a contract granting you a contractual right, doesn't that rather make the above poster's larger point though? Especially since that contract is the place where the salary and work are agreed upon. If I don't have a right to force you to work for me as a servant, then I need to get you to agree to do it willingly via some kind of contract.


Yes I should have been more specific. If it is agreed to than yes the payment is due. But the government forcing it is unjust.


Are notice periods, minimum wages, and restricting discrimination on protected grounds unjust as well? All of those are forced onto employment contracts in the U.S. (if not explicitly, then implicitly) regardless of whether employees or employers want them to be.


Most CEO contracts in USA come have a golden parachute as far as I know.


It cuts both ways.

I live in the UK. Here the obligation is symmetric. All my recent work has been on 90 day terms. That is, if either I or the employer wish the contract to end normally that requires 90 days of notice unless both parties agree otherwise.

My most recent employer decided their costs were too high compared to projected income, so they gave me 90 days notice back in 2019.

At that point I knew that in 90 days I won't have a job. I could start looking for a new job, able to tell any prospective employer that I can start on day D+90. I would still get paid, as usual, and my employer was entitled to insist that I continue to work as usual.

In fact of course they gave me garden leave, I guess that's probably an alien term in the US too? Garden leave means that the 90 day term still applies, you still work for them not anybody else, and they still pay you fully - but your employer thinks it would be best (for example because they're scared you will sabotage things, poach customers, or steal trade secrets) that you do not come to the office or use their computers and thus you cannot do your job.

I'm very awkward so I pointed out that they're short of cash, rather than having too many engineers, and so since I wasn't doing anything else I kept working, although I will admit I wasn't exactly the most motivated team member since I knew I was terminated. They had to go re-enable my git access, AWS access and so on, which had been severed when I went in to be told I was fired. Very amusing.

Now, let's roll back to my previous job. I'd been essentially head-hunted, I informed that employer that I'd be leaving, triggering the 90 day notice. I was actually at their offices at the time, (I usually work from home) and I informed them that I'd be available until close-of-play to negotiate the exact details. They got right down to the wire but eventually sent someone to work it out, and we agreed I would spend the notice period spinning up people who'd been brought in to learn what I do, and that I wouldn't take my vacation days, but I would actually leave on D+85 not D+90.


Gardening leave is quite common in the US. No sure whether the term itself is known, though?

Paying out a notice period is very different from severance pay. I can assure you that AirBnB does not have a 14 weeks notice period.

(American companies also pay you out the notice period, and some send you on gardening leave, if they want you out of the office. But notice periods in America seem to be generally shorter, like 14 days, for most more junior jobs. In the UK one month seems to be more standard?)


There is no right to the notice period in the US. They can fire you on the spot.


Many contracts still come with a notice period. So many people have contractual rights to a notice period. No requirement by law, yes.

Most contracts with a notice period still allow the company to just pay it out and send you home on the spot.


A very small percentage of US workers have any sort of contract


Moreover, as a condition of employment, many (most?) US workers must sign an “employment agreement” which is essentially a legal document written by the company, for the company. It’s like an employment contract except with terms that only benefit the company.


Legally speaking, you always have a contract when working for someone. Even if it's implicit and oral only.

You even have a contract when you are buying a piece of candy at the newsstand.

(At least in the common law world. In eg German law technically you have one contract for the piece of candy, and one contract for each individual coin you are handing over. See https://en.wikipedia.org/wiki/Abstraction_principle_(law) Germans are a bit crazy.)


That is NOT the case in the US. That’s the whole point of this sub-thread.

https://en.m.wikipedia.org/wiki/At-will_employment


Huh? Literally the first sentence in that article starts with

> At-will employment is a term used in U.S. labor law for contractual relationships [...]

Emphasis on contractual.

Or am I missing something?

A contract that can be dissolved at will is still a contract. Just like you can cancel your Netflix subscription at will, and it's still a valid legal contract.


Under the rules you live in you are not.

Why is it a good idea?

Employees less likely to leave without notice.

Employees stay longer because the safety net grows.

Less likely to speak poorly about you after leaving

More secure in their job. More emotional invested.

What are your reasons for not? Even if google stops selling at home they will keep the server alive for a grace period.

I had a friend who ran a bitcoin market. When the market shutdown he was responsible for customer records for 7 years and had to pay a company to secure access in case of requests.


Those are all good arguments for voluntarily paying for severance, or to agreeing to such a payment upfront in the employment contract.

But they are no reason to legally require severance pay.


I agree completely unless required by law.


Oh, I meant that we shouldn't have such a law.

Voluntary severance payment and contractually agreed ones are fine, if people want those.


You own a widget factory and I buy widgets from you. All of a sudden I don't need widgets, and I no longer need your products and stop paying for them.

You may have bought raw materials, hired people, set up a warehouse and stocked it with products anticipating my orders, but I don't understand why I should be obligated to pay for your products if I no longer need them.

All contracts generally include terms for termination of the contract. The tone of indignation is in the US, employers determine them unilaterally and employees don't have the bargaining power to do anything about it.


In many countries, there is no concept of 'at will employment'. It is not surprising that HNers from such countries would be incredulous.

Employment law in Europe, for example, frequently requires the severance terms to be determined at the time the employee is signed up. The employment agreement is a contract, and will be signed by all positions in the firm. In many cases, the severance terms are based on law.

Among other differences, for example, a German President is personally liable for the financial obligations of their company. If the company goes bankrupt, so does he.


Can you provide some references for your claims? Don't know much about Germany but that sounds totally made up as limitation of liability is the key concept behind the invention of companies. https://en.wikipedia.org/wiki/Gesellschaft_mit_beschr%C3%A4n...

I would imagine if a director breaks the law, only then he could be personally liable. And in that case I would imagine Germany does have higher standards than US.


https://www.mondaq.com/germany/CorporateCommercial-Law/64529...

"If the company is in crisis special obligations arise for a managing director the breach of which may lead to a personal liability of the managing director."


So this is quite a bit different and more limited than "If the company goes bankrupt, so does he." and closer to "I would imagine if a director breaks the law, only then he could be personally liable.", for example Adam Neumann might have had problems if WeWork was a German GmbH.


For breaking the veil of limited liability in German law, the managing director has to act in negligence/ gross negligence.


In theory I like this system. What are some of the downsides?


Significantly less risk taking and thus fewer globally competitive companies.


I think that if you want to make that argument, you probably shouldn't use Germany, manufacturing powerhouse of the West, as your example.

I'm not saying you are wrong, just that Germany doesn't really support your point.


"Among other differences, for example, a German President is personally liable for the financial obligations of their company. If the company goes bankrupt, so does he."

Not really. Directors are not generally held liable for debts incurred by their companies in Germany. However, they can be held liable if they are found to be in breach of their duties as directors. Also, the onus of proof is reversed in some cases (e.g. the director needs to prove he wasn't in breach of his duty).


>Among other differences, for example, a German President is personally liable for the financial obligations of their company. If the company goes bankrupt, so does he.

In US new enterprise have a very high failure rate, how do entrepreneurs survive in such environment?


They are protected by US corporate law. The debts of a corporation are the responsibility of the corporation. A corporation (Inc.) is treated like a person from that perspective. If a corporation runs out of money and cannot pay its debts and declares bankruptcy, the management is under no obligation to cover the debt, and the debt holders are out of luck.

A CEO (and other company execs) can be held personally liable only if there is fraud or other illegal acts. Mismanaging a company, or even simply working hard and not succeeding, are not illegal.

American firms can take on much more risk, so we tend to see both many more failures and many more successes.


German execs are also insulated from the debts of the company. Many German startups even use English (now Irish) limited companies.


I think you answered your own question. In the US, entrepreneurs are not personally liable. Now, that's not the same thing as saying that failure won't reflect badly on their reputation. But it is definitely a lot easier to have a comeback career if you don't have to declare personal bankruptcy.


Consider that perhaps new enterprises would not have as high of a failure rate.


Mostly because there are fewer new enterprises. People mostly only take the safest bets.


They move to the United States and take their companies there.


That's part of why Germany has fewer entrepreneurs.


So Scott Koegh is personally on the hook for the debt of Volkswagen?


worth noting that this severance is vastly more generous than you'd get from statutory redundancy in most (all?) countries.

the UK is one week's pay for every year, but with a maximum of £538/week and a maximum of 20 years for length service.

given that a software engineer who's been at AirBnB for two years is going to get 16 weeks of pay and probably makes _at least_ 180k/year, they're probably getting around $55k.


NL: starting point is one month per year of employment. There's more detail to it, but that is the starting point.

This compensation does not sound "vastly more generous", but not bad for those that were less than 5 years employed.


This is in practice just a deferred salary scheme. Since the mandate attaches an unavoidable additional liability to every year of employment, that will get rolled into the total cost of employment by accountants.

So yes, when you collect the deferred salary it feels generous. But you were getting less salary up until that point in order to make the system solvent.

One may well prefer this arrangement, but one can't evaluate the generosity of the payment without also accounting for the cost that made it possible.


How is it unavoidable? If the employee leaves on their choice, is severance paid?


I think they mean unavoidable from the company's point of view - they can't make you quit, so when they hire you, they have to assume if they ever need to lay you off, they'll need to afford your severance.


Yes — I was slightly incomplete in my description, but you are exactly correct about what I meant. Company liabilities include things you are obligated to pay under uncertain future circumstances, so accountants have to make sure that such liabilities can be handled if they ever arise.


You'd be in the top 5% of software engineers in Europe if you pull >$55k after tax ANNUALLY. Let alone as a parting gift.


I think European dev market is a lot more complex than that; if you work in Zurich or London, do contracting, work for a major bank etc then the market is way different for you than if you do (say) PHP as an employee of a non-software company in Berlin.

The baseline is decently middle class with a solid safety net but there's a lot more room at the top than you're making out IMHO.

As always, to make cash as a "working" dev you have to get as close as you can to a gigantic money funnel of some sort. The main difference from the U.S. is that there are fewer and different money fountains, especially missing unicorn and VC money. Finance, FAANG outposts and doing specialised things for huge real-economy companies still pay well.


Zurich and London top out at $100k, any more and we're talking managerial responsibilities. Compared to SF or SEA they are only paying ~25% market rate.

The safety net argument has no legs. Australia and Canada both have social benefits that far exceed the majority of EU nations, yet pre-pandemic there was no shortage of $150k+ dev roles.


Zurich does definitely not top out at 100k. Depending on your negotiation skills, you'll start at about 120-140k in the big tech companies, around 120k in data science consulting, 120k for data science in banks, 80-100k at the smaller software companies.


The number of European devs making >$100k is a fraction of a percent. Your numbers tell the story — the pinnacle of the entire European continent is still only paying 25% comparable US market rate, and 60% comparable AU/CA rate. In a city more expensive than SF.


London isn’t more expensive than SF. And I have colleagues who make £450k+


> London isn’t more expensive than SF.

Zurich is.

> And I have colleagues who make £450k+

Just as there are American devs pocketing 7 figures annually. Again, the number of European devs making >$100k is a fraction of a percent. You can be making $100k in the US after a 6 month bootcamp or in AU/CA with a couple of years experience.


> Zurich is Not when you factor in the tax differential

I doubt that $100k is the 99th percentile for London developers, maybe it is for European in general.


If you've read salary threads, you’d know that everyone on Hacker News makes $1.5 million per year as an entry level software engineer, owns three houses and a Ferrari, and has a supermodel significant other.


I've employed developers in Zurich.

I promise you, the market for developers does not top out at anywhere near $100k.

That's closer to a starting salary (assuming a university degree).


I had an offer in London as a dev in finance at ~300k GBP total comp and a Series B startup offer over 100k GBP and that was more than 4 years ago. Ended up going with a much smaller seed-stage company in Berlin because I couldn't stomach the finance people and liked Berlin.


£300k, how much would that be in base salary?


Less than half. Tbh I found the whole "guaranteed" bonus thing quite confusing.

London finance attracts a crowd that I had very little in common with. To be honest I only interviewed to see what it was like. It wasn't for me.


Yet to find the first company in London which really offers a guaranteed bonus ️


Is it ok if I ask your YOE and stack?


10 years as a professional dev, CS degree, 10 years before that as a hobbyist. Regular meetup speaker, couple of international conference invites.

Mainly worked with high traffic Ruby apps but also done production C and Rust. Side interests in VMs and compilers.

These positions exist if you're good, experienced and most of all, not a complete asshole.


But cost of living was much more expensive as well. Especially for housing.


Good luck finding a dev job malig 150k+ in Canadian dollars.


In Canada? Work at a fintech, FANG, or as a quant.


London doesn’t top out at $100k. Neither does Zurich


This one is more generous, true, but the real question is, because the employer decides, how likely it is to be better than European countries that have the same standard for every employee.


Most employees in the US are hired at will. This means that the companies are not obligated to continue to offer their employees work. Severance is usually paid by the employer so that the employee agrees to leave amicably and does not sue for wrongful termination.

Which country do you live in? Is it common practice for all employees to have severance negotiated as part of an employment contract? What happens if the employee decides to leave the employer before the contract expires?


In Belgium, they used the "Claeys formula" for many cases: https://en.wikipedia.org/wiki/Claeys_Formula. (I believe they use something different now, but it's hard to imagine that unions would have allowed a significant relaxation of the earlier rules, so it's still a good first order approximation.)

Some examples:

- somebody who makes 5000 euro gross per month who's 20 years with the same company would get ~15 months severance.

- somebody who makes 3000 euro gross who's 5 years at a company would get 7 months of severance.

Interestingly enough, the age of the employee is a factor of the equation!

When it's the employee who decides to leave the company, the company can require them to stay on for many months, again depending on how long the employee was with the company. Or the company can agree to release earlier, but it will still be on the hook for a significant amount of months of salary.

Let's just say that the decision to hire an engineer isn't done lightly.


In Australia it's not negotiable. Our employment laws dictate what severance payment is required if a company is letting people go to reduce costs. Those laws don't apply if the employee leaves of their own accord, or if they are fired for other reasons.


Is that in addition to or instead of unemployment insurance? That’s probably the most similar construct in the US.


I suppose it would be "instead of". Unemployment insurance isn't really a thing here.


Then the situation is maybe not so different? It's an amount you're entitled to when laid off, set by the government, which your employer has to fund proactively (payroll taxes).

Because it's set by the government, it caps out at well below a typical tech worker's burn rate, so it's little more than a brake on the depletion of our savings. When a tech company offers severance it's typically much, much more than what the government guarantees.

You also get the full amount regardless of how long you're unemployed, so e.g. if you get laid off with 7 weeks severance and find another job in 3 weeks, that's a free month of salary.


It's fulfilling the same role, definitely.

In our case, the payout is defined as 4-12 weeks of salary (plus 1-4 weeks notice), based on length of tenure. Since this scales with what people earn, there's little need for tech companies (or other well-paid fields) to offer anything extra.

On a related note, Australians are also entitled to 4 weeks paid leave per yer, which accrues if not taken. Employers are also required to pay out any leave balance (even if the employee leave voluntarily), which means most workers will have at least a couple of additional weeks paid out on top of the severance.

It's the same here, in that you get the full amount regardless of how long you're unemployed after they let you go.


We don't have unemployment insurance in Australia, we don't really need it.


That's not true, it does exist:

https://www.finder.com.au/unemployment-cover

No idea how common it is, though.


From what I understand, severance is also often offered as incentive to sign some kind of exit/termination agreement.


For a variety of reasons, unemployment is a split federal/state responsibility funded by insurance. The framework was established back in the Social Security Act of 1935. Unemployment is administered and has rules developed by states that need to meet Federal standards, and the feds fund parts of the system and keep the state funds solvent.

Benefits vary greatly. It has been awhile since I worked with this stuff, but IIRC Massachusetts is the highest payout ($750+) and places like Alabama, Florida, Mississippi and Arizona are <$300.

Severance is usually part of an employee contract (if one exists) or commonly part of an agreement at separation where the employer gets some benefit (waiving the right to sue, etc).


Because it's coming out of their pockets.


Same in Israel, but it's mandatory to pay a months' wages for every year you worked at the company. The employer has to pay into a fund that the employee can cash out when they're let go.


So are payroll taxes, and they're not "up to the company".

We can see from the priorities how workers have been left out of the decision making for decades in the US.


Aren't they though? My understanding is that they pay the payroll taxes on behalf of the employees but I think they aren't required to, it's just customary. If you're an independent contractor you pay it yourself.


Contractors aren't payroll, they're technically AP/suppliers. If you do payroll, you pay taxes - it's the law.


Because there's no legal requirement to pay any sort of severance in the US.

Just like, for example, there's no legal requirement to pay employees bonuses, so bonus pay is at the employer's sole discretion. In fact, salary itself is at the employer's sole discretion other than complying with minimum wage and overtime laws.

It's been my experience that severance for rank-and-file employees is rarely offered and is very miniscule if it is paid.


It’s an essential part of the Silicon Valley formula to encourage risk taking.

Grow fast and flame out? That’s ok. Shut it down as gracefully as possible and try again.


Unless you specifically negotiate something in the employment contract up front, they could just fire people and only pay out the notice period.

Severance pay is voluntary. So of course they can decide how much they want to pay.


I mean, as an American... I'm not even sure why companies give severance pay in the first place. It doesn't feel like something they should be obligated to do.


The employment contract is usually for an indeterminate amount of time. Breaking that contract is why severance pay is required.


I'd guess it's mostly to maintain morale among the remaining employees. People who are on the fence between staying or leaving are a bit more likely to stick around if they know they'll get a severance package if they're laid off but nothing if they quit.


How else would it be done?


In some cases it’s not, some states like California enforce minimums, but when they are going beyond the minimum then it’s obviously up to them.


In the US every company pays unemployment insurance. When employees are laid off, they receive unemployment benefits from this fund until they find a new job (for up to 39 months). Severance is the company "willing" to paying the laid-off employee more money than unemployment insurance.


> for up to 39 months

You spelled weeks wrong.


I'm not a fan of Airbnb's business but this is highly commendable.

The severance package is the core metric to judge a company that is doing layoffs. In this case, it sounds like Airbnb did the right thing. Airbnb fired people well in advance of when they were actually forced to. This enabled them to provide an ethical severance.

Some companies wait until the last minute and then provide two weeks or similar. These companies should be publicly shamed for all time.


I wouldn't judge them too softly, they did after all promote having an internal services food team for years and virtue signaled all over the place that they wanted them to be team members and not contractors like every other tech company (they got stock, sick days, vacation, benefits etc), then fired them all over Christmas break one year and replaced them with contractors.


Agree with you but....

4x12 = 48 weeks of compensation disbursed by the entity. Restated compared to some nightmare no severance scenario meant they effectively terminated 4 FTEs to achieve slightly less than 3 FTEs of cost savings (adjusted for healthcare costs).

I'm not arguing against AirBNBs approach btw. Their CEO had a wonderful podcast on the Masters of Scale pod roughly two weeks ago.

However the Rawlsian philosophy on that marginal employee that got terminated effectively to fund the severance for herself and her colleagues is a tricky ethical consideration.


It doesn't seem all that tricky to me. While losing any job is rough, losing a job with enough severance and benefits to cover the ensuing period of uncertainty and a job search likely isn't going to be that bad for people who were able to get hired by Airbnb to begin with. But losing a job without a safety net could be a disaster. Imo it's far better to put more people in the 'bad, but not that bad' situation than to put anyone in the 'disaster' situation.


Sounds amazing, I wish someone would lay me off like that, damn. Four months PTO with healthcare?!


It's confusing. Some read it as "COBRA is available at full price" and others as "healthcare paid by AirBNB". My understanding is COBRA is just the default. The company can't really block it, for 18 months. No action required.

So if AirBNB went out of their way to mention COBRA, it likely means they're covering it.


It's not. In this economy 3 months will pass by in split seconds and you may still not have job.


You actually have to pay the full premium for healthcare. But still, assuming a months pay covers at least 3 months of Cobra coverage, that is 3 months PTO to get your head straight.


As I recall, COBRA is pretty expensive.


I believe it's just the full cost of the plan you were already on, the sum of what you and your employer were paying for it.

So it can be expensive if your employer was paying a lot for it.


It can seem expensive if you ignored the compensation your employer was paying while you were employed.


for someone that just lost their job having to pay basically double what you were paying for health insurance it certainly is expensive from their pov. health care in america is not something any other country would ask to have save some esoteric elective surgery out of pocket if you are rich.


I think I've only had one job where the employer funded $ amount of my health plan was actually spelled out. My expected contribution was always made known at enrollment time but the employer contribution was left to blind speculation.


FWIW "Employer Paid Benefits" are shown on TriNet pay statements. TriNet is a fairly common PEO among startups.


They wanted like $1400/month for family coverage when I left my last job. I rolled the dice and went without it. It's available retroactively so if you need it later you can sign up for it.


The crazyness of the best country in the world. "I rolled the dice!". This looks insane to any non-American.


Unfortunately not to some here in Switzerland. The average adult here pays around $350 USD/month for just their coverage, according to official statistics. The total cost for a family might end up less than $1400, but not by much.

Edited to add source: https://www.swissinfo.ch/eng/society/new-method_health-insur...


A COBRA plan can be about ~$500-1000 for an individual in the US. A family can reach $2000-5000/month. Then, you are still sometimes left holding the bag for deductibles, co-pays, co-insurance and annual out-of-pocket maximums. Old but not way off: [1]. Some folks are better off on the private markets, especially exchanges.

[1] https://www.bankrate.com/finance/insurance/cobra-health-insu...


> A COBRA plan can be about ~$500-1000 for an individual in the US. A

A COBRA plan is just continuation of the same plan, at the same cost (except that the ex-employee now covers whatever part was paid by the employer), as you had when employed.

> Some folks are better off on the private markets, especially exchanges.

Rarely for an equivalent quality plan if they were in a large group plan, which are usually better than individual plans, even exchange plans, on a cost/benefit basis. Excluding, of course, consideration of exchange subsidies if the ex-employee would qualify based on their reduced income.


Anecdotally, my employer's group health plan costs ~$650/month for just me. A roughly equivalent plan on the NY exchange is ~$750~900/month (my insurer doesn't participate in the NY exchange and also my employer customized my health plan so there's no direct comparison either way). So there's definitely some savings present.


Oh it looks insane to Americans too.


In the future, you should just look into temporary insurance. Almost every insurer offers temporary plans that you can buy for 1-6 months of coverage to handle a gap between jobs. Unless you have some reason to keep your COBRA coverage (e.g. regular appointments for a chronic condition), the temp insurance acts as good emergency coverage and for very small amounts (last time I did it, ~$250 total for 3 months coverage)


Yeah, most people don't realize that you have 90 days to elect COBRA retroactively after you leave a job. They'll reimburse all your expenses incurred during that time period under the program as if you'd had it the whole time. Once you pay the premiums, of course.

So you basically get 90 days "free" COBRA, but your deductible is 1, 2 or 3 months premiums.


You say that before you need to find a new job in this environment


I have a feeling engineers who managed to find employment at AirBnB in the first place will turn out just fine. It's not exactly your local no-name web dev company.


A lot of big tech companies continue to hire, AirBnB was at the rough intersection of discretionary leisure travel, the gig economy, COVID and tech. aka "the big oof"


"Airbnb will also provide 12 months of health insurance through COBRA"

That just means that it is available to you -- not that they are going to subsidize it.


They will "cover" 12 months of COBRA, which I take to mean they'll pay the premiums:

> In the midst of a global health crisis of unknown duration, we want to limit the burden of healthcare costs. In the US, we will cover 12 months of health insurance through COBRA. In all other countries, we will cover health insurance costs through the end of 2020. This is because we’re either legally unable to continue coverage, or our current plans will not allow for an extension. We will also provide four months of mental health support through KonTerra.

https://www.cnbc.com/2020/05/05/airbnb-to-lay-off-nearly-190...


Anyone who loses health insurance due to losing their employment (even if they voluntarily resign) is legally allowed to buy COBRA for 18 months. I think they are paying for it, otherwise this would be a fairly meaningless statement since the employer isn't involved with COBRA at all and that's less eligibility than any employee would have.


Many times employers will make statements like this for better PR (always leaving out that they were required to)


In this case, they would have stated 18 months.


I mean, if they're paying 4 months salary, and healthcare optional, they'd probably just pay 3.5 months salary and offer healthcare.


Can you name a single time this has happened?


Something like that happened to me. I was a grad student until the project I was working on ran out of funding. Their website said if you left the program you could pay for health insurance out of pocket under the same plan you had while a student.

What they left out was that the company could reject you as a customer if you had a pre-existing condition. (This was before the ACA took effect.) They can legally do this because COBRA does not apply to grad students.

Fortunately, Oregon at the time had a state-subsidized health insurance plan called OMIP for people that were rejected by private health plans. The premiums weren't cheap, but they weren't worse than equivalent plans. Eventually OMIP was superceded by the ACA marketplace.


I worked for a company that was sold for scraps and they laid off all but there people. It didn’t affect me, I got a contract the next week with one of our clients that I worked with and paid for Cobra.

However, my Cobra eligibility died when the acquiring company cancelled their health care and moved everything to India.


Almost literally every company that had to make changes in compliance with COVID-19 health and safety guidelines.


So that’s a no on the example?


Agreed, it definitely sounds like they are paying for it


Do you realise you have to find a new job within those four months?! It's not 'time off', it's time desperately searching for a new job until you start eating into your savings and your children end up starving.


Air BnB employees in California will be eligible for $4200/mo in unemployment insurance, so compound the two together and that is a lot of dough.

Comparatively I got 0 severance from my small company but am grateful for the unemployment insurance.


What is the median salary of people who were laid off?

It is some how hard to believe that they will start starving within a year after a layoff (perhaps if they plan to maintain their expense levels unchanged, but still sounds very improbable)

What are the calculation that lead you to this conclusion ?


Not everyone manages to negotiate the same high tech salaries even if it looks like they're working for a prestigious company It may take a very long to find new work. People have mortgages that they may struggle to afford long term - or at all if they can't find a job with the same salary, meaning they could have to sell their homes. Some people have debts for whatever reason out of their control. Some people have many family members depending on them. Not everyone's got a simple life.


My wife was part of this layoff, worked in their HR org and we just bought a house beginning of the year borrowing heavily from our 401(k)s. So we immediately now have to payoff this huge loan back to her 401(k) which we were paying per paycheck. 90%+ of her team were let go, so she's competing with all of them for the few roles available in other companies. Most of those 1900 people were not developers, so the next few months will have a lot of uncertainty for us. "Not everyone's got a simple life."


that's true. Not everyone.

Even people who are employed can go broke, declare bankruptcy, and not being able to pay for their previously-enjoyed lifestyle anymore.

The financial security ladder has many steps.

Hard to imagine that programmers, product managers, SREs that had successfully passed AirBnB interviews would be so close to the bottom of that ladder, that their children will go hungry within months of stopping to receive the severance.


Something that scares me is that tech interviews are so fickle. You could pass the Google interview one day but be rejected by everywhere else the next.


Yeah, passed Apple interview but didn't pass FB one :)


The US provides food aid to people with low or no income.

"Eating into savings" is what saving are made for.


There are many caveats to your first statement. For example food aid (SNAP) may be time limited. The federal govt is concerned that you may be deterred for getting a job.


I’m surprised they were still handing out options - don’t most later stage startups switch to RSUs? I’d hate to have to decide whether to exercise today, cliff or no cliff.


They're RSUs, Airbnb hasn't been given options for the last 7 years or so. Techcrunch is just reporting it wrong.


Does anyone recall if Airbnb were one of the firms to institute more employee-friendly exercise windows? If so that takes some of the pressure off the decision.


They are probably double trigger rsus with 10y expiration


You mean if you're still an employee? I've read their RSUs have 7y expiration, which is part of the whole Airbnb IPO problem because the ones from 2014 will start expiring next year.

But what's the window to exercise once you leave the company? I doubt it's until expiration.


RSUs normally expire only if there’s no liquidity event (ipo or sale) and once vested remain yours even after end of employement. Ofx that depends on specific contract


Forgive my ignorance but how do RSUs expire? I thought those are just stocks?


If these are double trigger RSUs they don’t fully vest until two conditions are met:

1) the usual employed by the company for a certain period of time

2) some qualifying liquidity event (ipo / sale)

This is to avoid employees needing to pay taxes after #1 even though the stock can’t be sold. However for tax reasons there has to be time limit when they either vest or expire worthless. Depends on which lawyer you ask how long that can be, but generally most are less than ten years.


They are RSUs, at least in the US.


Long term employees have options. All newer US based employees should have RSUs


I haven't seen RSUs outside of publicly traded companies.


Late stage startups have to offer RSUs, as the equivalent option package becomes extremely unattractive if you depart before the company is public.

Imagine, for example, an initial option grant of 180K shares at $2.00, which expire 90 days after you leave. Then fast forward two years: The valuations have doubled every year, and half are vested, so you have 90k options priced at $2, but that last valuation puts at $8 each. Sounds like you have a lot of potential money right? Maybe, but not if you leave. If the company isn't public, you either have to rely on some secondary market that might be really shady, or have to hold your shares until IPO. To do so, you need to spend $180K, and prepare for an AMT tax hit of, roughly, 28% of the gains. 90k shares, with $6 a a share paper gains, means $135k in taxes that year.

So barring that secondary market for the shares, we are talking about spending $300k exercising the options. Few people can, or are willing, to put that much money in, even if on paper they are up hundreds of thousands of dollars.

RSUs will demand action at IPO, as you can't delay the exercise forever, but it's far better than, in practice, letting a majority of options lapse, even when you are pretty sure they'll be deep in the money at IPO.


RSUs are common in late stage startups. The share price at the time of grant is calculated based on an estimated valuation. If I remember correctly, in the year or two leading up to IPO, Uber issued RSUs to employees at a valuation of $49/share so the IPO price of $45 was already below grant price for many that joined late.


Non listed companies do give RSUs. For example: Stripe


I got an RSU offer from Pinterest a couple years back when they were private, though I turned it down.


Yet they are quite common in late stage pre-ipo companies bc few will take their options


I thought RSUs are only given by public companies. Anyway, they would be crazy not to exercise.


Hopefully they have cash to cover the exercise and the taxes!

Tough choice to make right when you just lost your job. The tax bill could be tens of thousands of dollars or more.


If they don't have the money they can take a loan (maybe hard without a job) or try to raise it (lots of people will be happy to invest). Let's not forget that many of these individuals have been making top dollar. Airbnb is known to be very competitive, even with FANNG level salaries.

I don't see it as a tough choice. Airbnb will IPO, it's just a question of when. It's a safe investment to make. This is a company operating all over the world that had $4.3B in revenue last year. If not COVID-19 they would've probably IPO'd very soon. They will get through it.


Their 2020 revenue will likely be less than a quarter of that. And 2021 might not be much better. They have a struggle ahead.


It would be nice if you could just hand over a percentage of the options to the government as a tax, instead of having to pay in dollars at a guess of the value.


I am surprised that isn't an option it certainly is in the UK


I'd expect the options might be under water based on recent funding announcements. Probably still expensive to exercise, but I can't see how there would be a tax liability if they are under water.


i’m not super in the know here, but why would corporate financials be relevant to the tax obligations of individuals?


It's pretty much impossible for us to say in this case since the terms weren't disclosed that I know of. They've been described as debt and equity. It's reasonable to assume the equity component would imply a certain valuation, and that valuation could be down from previous valuations.

If you received options at a strike price at the peak valuation, then the current valuation may be below that level.


Yeah it's going to be a hard decision to make for a lot of these people, especially given some of the bad press that these kind of gig factories have been enduring.


Some private companies offer RSU grants. I've been offered them.


Why would you not want optionality? Optionality always has carries an intrinsic positive value.


1 RSU is worth 1x the stock price. 1 option is worth the delta between the stock price and the strike price, meaning 1 RSU is always worth more than one option.

Usually you get more options than you would RSU’s to compensate for this, but there’s still a risk/reward tradeoff. I have had stock options that ended up worth $0 because they were underwater. RSU’s would have been worth $non-zero.

The fact that RSU’s retain some value when the stock price goes down is highly relevant to a company like AirBNB which is undoubtedly struggling with the current situation. Also relevant may be that AirBNB isn’t a public company yet, making their shares relatively non-liquidifiable. This can pose problems both ways: if you get RSU’s in that situation you’ve received “taxable income” in the form of a non-liquidifiable asset and if you get options, you have to choose whether to buy stock in a travel accommodations company in the middle of a pandemic that just laid off 1/4 of their workforce, hence potentially incurring a very strong risk of loss.


You don't necessarily get taxable income from RSUs [edit: when they're granted] if they're structured in a 'Facebook Style' RSU which has an expiration if the company does not IPO within a certain time frame.

As long as there's a real risk of loss you can avoid the taxable income and private companies with high valuations will do this to help employees avoid the bad tax situation on an illiquid asset (without need to have huge amounts of cash to exercise options).

Options similarly must expire after 10 years for similar risk of loss tax reasons (as I understand it).

I was told the RSUs are 'Facebook Style' because they were the first to pioneer this.

Even options with a low strike price can be problematic because tax law is dumb and charges tax on the spread before sale when you exercise (so you can end up with a huge tax bill on exercise without the ability to sell the shares to cover it). ISOs were supposed to prevent this, but AMT has not increased to match inflation over time and was never updated to accommodate for this case specifically so you still have to pay tax if you hit it (which you will because it's low). This wasn't considered originally because companies intending to IPO were not private >10yrs so expiration risk was not a serious problem and you could just wait for the IPO before exercise.

So with options even if you save the exercise cash you have to save a large amount for taxes depending on the spread, or deal with a bunch of loan shark like companies that will take a cut to front you the capital.

For most people RSUs are probably preferable unless you get in really early and can exercise all the options when the spread is zero (preferably with an 83b election for early exercise on non-vested shares).


i think you're saying this, but just to clarify:

RSUs (even facebook-style) are definitely taxable. With options, you're in control of when to take the tax hit. With facebook-style RSUs, the tax hit comes when the stock gets distributed (taxed as ordinary income) -- usually in the form of withholding some amount of shares.

---

Important to remember with RSUs in pre-IPO companies: even though you might get shares distributed at IPO, you're usually subject to a lock up. This is unfortunate because if you receive stock at IPO, you have to pay taxes at them -- so if your company IPOs at $50, then drops to $20 when the lockup expires, you have to pay taxes on the shares you received at $50 value even though you couldn't sell shares at that value.


Yes, thanks for the clarification.

My understanding is they're taxable, but only after they're liquid which makes it easier for the employee. I think most companies doing FB style do something fancy to avoid the distribution tax lockout issue (witholding some to cover tax or direct listing to avoid lockout).

The situation where you have a huge tax bill and no cash to pay it (or worse a huge tax bill and your illiquid stocks have crashed to $0) shouldn't happen, though I guess there's still a chance in the pathological case you describe? Not sure if that's avoidable.

The other thing I forgot to mention is that if you do risk all this cash on option exercise/taxes and your company does go to $0 you do get to take a $3000 AMT tax credit each year until you die (but maybe only if you don’t have kids or something, can’t remember) - it’s not great.


Actually, underwithholding can still happen. Employers may withhold at a flat 22% federal rate, which can be significantly lower than a highly paid employee's actual marginal tax rate. So the employee may still need to increase the withholdings on their regular pay, or make an estimated tax payment for each quarter of RSU income.


This is one thing I've struggled to understand.

Scenario A: RSUs have an expiration date. RSUs you own expire before the company hits a liquidity event.

Scenario B: RSUs do not have an expiration date but the company goes bankrupt/dissolves and never hits a liquidity event.

Is one of these scenarios taxable and the other one not? One of my biggest fears about joining a startup (pre covid) was scenario A happening.


This is my current possibly incorrect understanding:

Scenario A there’s no tax, but the company is failing to hold up their end of the bargain and this would probably lead to everyone quitting or some sort of RSU regrant.

Scenario B I think you’re taxed when they vest. If there’s no IPO then you don’t get any money.


The other relevant point, in favor of RSUs is they usually have a double trigger for settling. One is service time, and the second is an equity event. Which is nice because you basically earn the RSU based on service time, but it doesn't truly settle until there's a liquid market available to dispose enough shares to cover tax liabilities.

This is why you'll see recently IPO'd companies reporting large one-time equity compensation numbers.

edit: s/vesting/settling. I believe "settling" is the term actually used.


Yeah I’ve never seen how this works during an IPO cycle, just in an already-public company.


If you started working at Boeing exactly a year ago and were leaving today, would you rather have been granted RSUs at a notional initial value of $371.60/sh or been granted options at a strike price of $371.60/sh?


Wouldn't you pay income tax on the RSUs based on the notional initial value, and only pay tax on the options if you exercised them?


Not really. RSU’s don’t have a “notional initial value” for public companies; if you get them, you pay tax on the number of RSU’s you got times the stock price at the time you get them. Your vesting schedule will just say, “X units of ABC on 5/1/20” with no dollar figure.

Brokerages will typically set things up so you can automatically sell enough shares to cover your tax liability as soon as they vest.

Typically you have to amend your cost basis on your tax return for this to actually work, for some stupid bureaucratic reason. Probably a conspiracy to make people who get equity compensation buy the more expensive version of TurboTax.


(Under US law,) You pay income tax on RSUs only when they are both vested and released. (These typically happen on the same day, but in the future, not on the grant date.)


At my employer they withhold taxes from the RSUs themselves as they vest (taxes are withheld at the bonus tax rate using integer multiplication, I believe).

E.g.: you'll get Math.floor(x * (1-bonus_tax_rate)) shares and will owe no income tax (unless your marginal tax rate is over the bonus tax rate). After that point, you'll only owe taxes on possible capital gains from price at the time of vest to the time you sell.


Well, yeah, that's Boeing, but if I'm going to work at a startup I want options, I want lots of them, and I want a good strike price. After all, if it's not going to do damned well next year why am I even going there?


RSUs, as structured at companies I've been at, always have upside: you can sell them for the stock price, which is a least $0. At the worst, you make nothing. Tax is paid upon acquiring them by selling a number of the acquired RSUs to pay for the tax.

Options, however, can have downside: tax can't be paid with the excerised option itself, because you can't sell the exercised option. So you have to pay the tax out of pocket. Meanwhile, the company can go under, and render the options worthless: you've lost the tax amount. If the company's valuation increases significantly, the taxes can be fairly significant. But you also can't just wait to see if the company succeeds, either: every company I've been at forces you to exercise within a certain amount of time if you leave the company.


You don’t have nearly as much “optionality” when you have to come up with $X00,000 within 90 days of leaving your job or forfeit your equity


Dumb question here, I don't really understand what an option is in this context - can you just think of it as a call with a expiration of the vesting date and strike price at whatever they set? So they're giving you calls, with a $0 premium?


Not a dumb Q at all.

It's a call option, with no premium paid, a strike price specified [typically the last 409A valuation or other better proxy of current value], subject to vesting [cannot exercise before this date], but with an expiration some number of years into the future (typically 10 years from the date of the grant).

So you had it basically correct, except they don't expire at the vesting date.


Options are awful. Exercising them can trigger AMT, where you get to pay taxes on money you don't have yet (and cannot get) at a time when you probably just spent a lot of your savings to purchase the options.


Bc you lose your optionality after leaving the company - terminated employees would need to decide whether or not to exercise their vested options within some post-termination window (typically 30-90 days)


Which would you rather have: a $100 bill or the option to buy a $100 bill?


The RSU and the options aren't priced equally, though.

More like a $50 bill or the option to buy a $100 bill for $25


There are other factors at play. Most employers offering options don't pay as much in total as those employers offering straight up RSUs.


That's why when a yet another aspiring startup wants to hire me, I ask for a high sign on bonus as an insurance, monthly vesting cycle, at least 200k in base pay and high severance upon termination. Never been given that, but I don't regret: looking back, all those "just 1 year till IPO" companies are underwater.


Monthly vesting without a year one cliff is not really done, AFAIK. I also don't think that there is a lot of wiggle room for negotiated severance terms. But sign on bonuses and 200k base pay could certainly be on the table.


It happens at both F & G in FAANG.


I had a first year cliff at Google a few years ago. But they might have changed that.

Facebook definitely doesn't have a cliff in 2020.


Changed in latter half of 2017.


Interesting. Do you know why?


More employee friendly


But why didn't they do it before then?


It was just acceptable before to have a 1 year cliff? Also it was done to placate Nooglers not getting a refresher for the first year (although that didn't make any sense and some Nooglers in 2017 got neither end of the stick).


Thanks!


Monthly vesting in the first year?


Yep. That's what I had at Google. Was selling shares as soon as I acquired them (no issue with GOOG but I preferred more diversification). I recall there being some admin time needed (~2-3 months?) before I had access to said shares but as soon as I did all 2-3 months worth were "vested" and I started cashing out.


Monthly at Google, quarterly at Facebook.


The vest frequency depends on the size of the grant.

Some grants (small) once a year Bigger - quarterly Large - monthly


Can confirm that at G.


The only point of the one year cliff is to pay someone less, or keep a startup’s cap table clean. For a public company there would be no point.


The other point is to bind people to the company.

It's very similar to a sign-on bonus you can claw back in the first year or two.


Looks like finally a comment thread where there are no pitch forks against G. Still waiting for someone to concoct a reason as to why this maybe bad for employees :D Also it's quarterly at FB.


Snap does monthly no cliff as well.


Most startups are an unintentional scam by unwitting founders.


very astutely stated. I think many of us make fundamental attribution mistake - what can be attributed to ignorance/stupidity should not be attributed to malice.


I think I'm missing something here.. but how can one negotiate severance pay for termination.

I was under the assumption that companies offered severance pay as a means to save face.. and this is not part of the offer negotiation.


For some high-level positions, it gets negotiated up-front. You're leaving some other company, taking a risk, and there's a good chance you might not be right for the new company.

But if you're less high-level but rare and desirable, well, some situations, like moving cross-country, might make it a bit appropriate.


> I was under the assumption that companies offered severance pay as a means to save face.. and this is not part of the offer negotiation.

Quite the opposite- this is how exec compensation works. It seems less common in startup land but I've dealt with it before


Everything is negotiable. You can negotiate a private office with a ocean view if you're valuable enough. This won't work for rank and file employees obviously.


anything is for sale and on the table, you just have to ask/demand it. Doesn't mean you're going to get it though.


Are you an engineer or a professional athlete?


I think Netflix has actually likened its engineers to a "pro sports team."


Same, those clowns are Sky Rocket Ventures wouldn't stop calling me. I told them to match 65% of my then-salary, they realized they weren't talking with a broke 20 year old kid and stopped calling me.


If you've never been given that then this is content free.


Mostly, but not completely content free.

Lots of people are afraid when negotiating, and the original comment shows that even making big demands up front is not catastrophic. You can still cave in later.


The "high severance upon termination" is smart, I never thought about asking for that. I'll definitely try that in the future!


This is called a a golden handshake: https://en.wikipedia.org/wiki/Golden_handshake

Unless you are receiving executive level compensation and/or you have a serious public reputation on the line, no reasonable company would consider giving you that. It would give you the perverse incentive to try to get fired and someone negotiating for that would be a strong negative signal - an economic moral hazard. https://en.wikipedia.org/wiki/Moral_hazard


There's a reason nobody has ever extended him this offer, and I suspect this is it.


Anybody accepted those terms?


He literally wrote "Never been given that"


there are other people here who might have made similar attempts


Nope, no one. And I could negotiate terms with directors, VPs and CEOs (of small firms) over lunches: meaning that they deemed it valuable enough to spend a few hours of their time on me, make a sales pitch and listen. Some admitted that while my terms were reasonable, it would just too expensive for their company to hire me.


What’s your batting average?


"Never been given that".

Zero, apparently.


As a European, that isn't great. (options excepted). Usually I thought you get 14 weeks plus a month for every year of service, not a week.


But your pay would be $50k p.a. rather than $175k


But your healthcare would be very cheap, if not free, wouldn't be tied to your employment; education cost would be minuscule compared to US; kids would benefit from the first two factors too; minimum annual vacation would be 4 weeks, mandated by law.

Sticker price doesn't tell the whole story. I'm not saying that the total benefit is lower, but the cost of earning that $175k is definitely much higher than the cost of that $50k.


Health care is about $500 a month for someone in their 30s in the USA who is healthy. That doesn’t make up $125k.


Sending your kids to school all the way up including university costs about ~€10K per kid in Europe. How much would it cost in the US? ~$150K? I think that would make up another large chunk of price difference.

And: it’s available for every parent. Not just those in nice tech jobs.


For California residents, the top state schools are ~$57k in tuition for all 4 years (total). Yes, American private universities would cost more, but that's a choice to pay more if you think it's worth it.


That's a choice you don't have to make if you go to a top university in the EU though.


Sure, but for the vast majority of students they can get a quality education in-state.

Plus schools like Cal, UCLA, Michigan, UVA and UW are among the best in the world


As the pandemic demonstrated, quality of education is hardly relevant. It is all about the credentialism. 16 yo kids in Palo Alto didn’t threw themselves in front of the caltrain because they so desired a quality education. It is because there is so much competition in labor market that even their multi-millionaire parents could do so much. Why do you think we had an Operation Varsity Blues? If hyper-affluent is under this much pressure to cheat, what chance does the $175k/year software laborer’s kid have?


All the way up is 17 years about of school. A $100k annual difference still puts the tech employee way ahead.


Not if you count rent / mortgage, car & car insurance or kindergarten.

And you medical coverage might still cover less than the European one.


>Not if you count rent / mortgage

Depends where you live. There's no reason the 175k employee can't live somewhere "bad" or suffer a long commute. Most major western european cities and their suburbs are by no means cheap to find housing in.

>car & car insurance

Most white collar Europeans with families own cars. Owning and operating a vehicle is astronomically cheaper in the US, even in California which has insanely high costs compared to the median or mean state.

>kindergarten

Part of the free (at the point of use, obviously it's paid for by taxes) public school system in the US.

>And you medical coverage might still cover less than the European one.

I don't want to have a healthcare debate but the cost was addressed higher up the thread and the difference in coverage between what American BigCo employees get and what Europeans get (and both those classes of insurance are diverse enough to make comparison impractical without sweeping generalizations) is not going to be meaningful except in the edge cases.


> Depends where you live. There's no reason the 175k employee can't live somewhere "bad" or suffer a long commute. Most major western european cities and their suburbs are by no means cheap to find housing in.

I don't think there are many "bad" places that are cheap around Silicon Valley.

Most western European cities have neighbourhoods that are drastically cheaper than the well-off ones.

> Most white collar Europeans with families own cars. Owning and operating a vehicle is astronomically cheaper in the US, even in California which has insanely high costs compared to the median or mean state.

New cars in America are twice as expensive as the average in the EU.

Average car insurance in America is five times as expensive as the average in the EU.

> Part of the free (at the point of use, obviously it's paid for by taxes) public school system in the US.

Sorry, I meant nursery.* Kindergarten is free in the EU as well.

> I don't want to have a healthcare debate but the cost was addressed higher up the thread and the difference in coverage between what American BigCo employees get and what Europeans get (and both those classes of insurance are diverse enough to make comparison impractical without sweeping generalizations) is not going to be meaningful except in the edge cases.

Well that's convenient. Based on the American medical debt lets go with a lesser coverage for the American workforce. Also it's not taking into account the cost of opportunity of having medical insurance event when you won't be employed anymore in case of an accident or other reason.


>I don't think there are many "bad" places that are cheap around Silicon Valley.

They're not cheap relative to other parts of the country buy they're cheap relative to where most white collar employees are living. The janitor and the plumber have to live somewhere and you can pay what they pay if you don't mind living among them.

>Most western European cities have neighbourhoods that are drastically cheaper than the well-off ones.

And in American cities those neighborhoods are particular suburbs (often cities themselves). Cheap housing that is literally in the city is much less numerous.

>New cars in America are twice as expensive as the average in the EU.

You can't compare car prices without comparing the cars and the associated costs. Americans buy much larger more expensive vehicles because they can because the taxes are lower, the fees are lower and the insurance is cheaper. This topic has been beaten to death. Americans buy $30k crossovers because those $30k crossovers cost $30k out the door. Contrast that to the typical taxes on new cars in Europe and you'll see why Europeans gravitate toward lower purchase prices.

>Average car insurance in America is five times as expensive as the average in the EU.

Citation please. This flies in the face of all my anecdotal experience.

>Sorry, I meant nursery.* Kindergarten is free in the EU as well.

We call that daycare. In the US you have an entire range of options from a high priced daycare with a low child:staff ratio, located in a high end part of town, quadruple extra special background checks on all the employees, etc, etc all the way down to single person cash only operations that people run out of their homes. It's as expensive or cheap as you're willing to make it. Remember, the poor families have to send their kids somewhere too so it's not like options don't exist at every price point. It's rare in tech because the employee demographics result in low demand but many employers offer free/cheap on-site daycare or a voucher to a particular daycare as a job perk. That said, work from home perks that are common in tech can alleviate some of the demand for daycare.

>Well that's convenient. Based on the American medical debt lets go with a lesser coverage for the American workforce. Also it's not taking into account the cost of opportunity of having medical insurance event when you won't be employed anymore in case of an accident or other reason.

I'm done debating with you. I'm not going to get tricked into trying to defend the American system as overall better which is where you seem to be nudging the goalposts toward. All I am saying is that even with it's failings someone making 175k (a pay grade certainly not representative of the workforce in general) is likely better off with it than taking a 100k pay cut for the European system.


So let me get this right.

It is possible to spend the same amount in medical, car and daycare expenses if you keep a job while being ill, ride a beat-up car and leave your kid to a shady cash-only operating in someone's home.

So explain to me how earning $100K more is so interesting again?

cf: Average American car insurance prices: https://www.businessinsider.com/personal-finance/average-cos...

cf: Average European car insurance prices: https://www.insuranceeurope.eu/sites/default/files/attachmen...

cf: Average American prices for Toyota Corolla: https://www.numbeo.com/cost-of-living/region_prices_by_city?...

cf: Average European prices for Toyota Corolla: https://www.numbeo.com/cost-of-living/region_prices_by_city?...


You can get a new Toyota/Honda car for 2 months pay after taxes in the US scenario. And it’s trivial to go to Nevada from the Bay Area to make the purchase and pocket the cost difference if you have a spare weekend.

You spend more on medical out of pocket, but it’s a drop in the bucket compared to the pittance folks make in Europe. Set aside $200k over 16 years of school/daycare and you’ve still cleared in excess of a million dollars more than your European counterparts.

There is a reason the top SWEs in the world flock to the tech companies in the US. The income is drastically better and if you don’t succumb to lifestyle inflation, you can live like a typical European middle class citizen (one car, tiny apartment, little eating out) and retire after a 15 year career.


> There is a reason the top SWEs in the world flock to the tech companies in the US.

I can tell you from experience that no developer I have ever met in my career want to move to the US. Sorry to burst your bubble. And it's not even a question of money for most of them.

> The income is drastically better and if you don’t succumb to lifestyle inflation, you can live like a typical European middle class citizen (one car, tiny apartment, little eating out)

That's not a typical European middle class citizen. Typical European middle class citizen already bought a house within that timeframe.

> retire after a 15 year career

Not sure where you're retiring but it's not going to be Europe because you would be way, way off money wise since you don't own anything.


That Europe cost seems high, tbh. In the Nordics for example I'm pretty sure everything is paid for.


all is paid for, at least in Sweden and Finland (not sure about Norway and Denmark), up to PhD


But you won’t be 30 and healthy forever. Medical costs skyrocket with old age, at a scale that can easily make your 100k/year savings irrelevant.


$100k/yr savings over 10 years is $1M. Were you assuming someone would blow the money?


To give one idea, nursing home room cost is 100k/year. Considering the possibility of chronic conditions, specialized treatments and overall increase in healthcare usage, in the span between 70-90 it is very easy go over >2M.


My parents put up grandma with Dementia in PA for about $50k a year in nice place. Are you drawing figures from movie star nursing homes in LA or something? Do you think the average American just puts a bullet in their head after 70? The household income in this country is about $60k a year. Your math is ludicrous.


Health care is >$800/month in Germany. I don't get why we get away with the notation that health care is free. It's not free, health insurance is simply compulsory here.


800$ is the nominal price. Real price is the fact that it is not tied to your employer, particularly your employers’ negotiation power with the insurance company. Which in turn increases your negotiation power as an employee. Not only for pay, but also other non-priced issues like quality coworkers, meaningful job etc.


In Sweden it's almost free.

You pay as you go with ceilings of around 100$ for medicines and 100$ for doctor visits, kids are free.


Ohhh, spicy! But yeah, don't cry for us USA tech workers(on the whole).


I feel like this is a bit of a sweeping generalisation. Certainly many countries in Europe would not give this. And others would have maximums which are lower than typical Airbnb pay.


Not to mention that losing health insurance coverage wouldn't be a concern.


And typically much higher unemployment numbers


Not these days. Europe is doing much better than the US in terms of unemployment - wonder why?


The USA's unemployment rate in March 2020 (4.4%) was lower than the EU's unemployment rate in January 2020 (6.2%) according to a very casual Google search. I'm curious how you're drawing this. Are you saying the EU has lower unemployment today than it did in January?


It's amusing you post pre-COVID numbers for both regions. Best comparison would be April numbers for both EU and US. The US is around 20% now [1].

The US short-term unemployment numbers are way up, because the US didn't do enough to help small businesses weather the storm, so they laid off their workforce. In contrast the EU supported their businesses and workers and consequently people are taking leave instead of unemployment.

[1] https://www.marketwatch.com/story/millions-of-lost-jobs-may-...


This is an accounting gimmick. The US has clearer unemployment conditions and also has given relief. In countries in the EU (and it varies a lot) you would see they are still employed, but not working and taking a paycut. That's really the same as unemployed.

In any case my comment was about the meaning of having severance in contrast to having a job, not about crisis handling.


If you meant "these days" as specifically in response to the COVID-19 crisis, we don't have basis for a useful comparison. As another commenter pointed out, the US is delivering economic relief primarily in the form of expanded unemployment coverage whereas Europe is taking a myriad of business support measures. Whether one is better than the other is not obvious yet it's effectively what unemployment numbers would reflect.


As a European I wouldn't be too fast to gloat - the EU is trying to keep jobs on hold but it's not clear to me what will come out of this - it seems like the restrictions are going to be here for a long time and keeping businesses afloat artificially could end up blocking restructuring. My biggest concern right now is that migration restrictions are going to kill seasonal manual labor migration and government unemployment subsidies will prevent local population from taking up that work - we could end up with major issues in things like crop harvesting.


Where is that? Many countries are already taking seasonal workers with 14 day quarantine.


Glad to see the money they are stealing from those of us who can't cancel our summer airBNBs is going to a good cause.


Is it just a certain time period? I've cancelled two stays and have received full refunds, but both were in April and May of this year.


They're gradually pushing the time period back, as of a couple days ago I believe it was end of May. As of right now it's for "stays and Airbnb Experiences made on or before March 14, 2020, with a check-in date between March 14, 2020 and June 15, 2020"

Of course, events as far out as late July are cancelled due to COVID-19

https://www.airbnb.com/help/article/2701/extenuating-circums...


Additionally, this policy has been modified since COVID arose to only apply to 1.5 months out.

In the past, and in fact when I booked my airbnb (late last year), extenuating circumstances would have easily covered an epidemic 2 months out.


Mine is late June / Early July in Italy of all places, and is not covered. They keep extending the coverage period though so I'm crossing my fingers.


If they won’t let you cancel, and you don’t want to go, I’m sure there are plenty of ER nurses that you could donate your booking to. I also keep hearing of hospital bed shortages.


How come you can't cancel? Did you book at place with strict cancellation policy or is there something else?


Yes, strict cancellation policy. For those following the drama, they keep extending their extenuating circumstances policy out but it doesn't cover most of the summer yet. Apparently the circumstances are only extenuating for the immediate future.


I wouldn't worry, it will extend out.. we aren't going to be out of this mess for 12-18 months.... the US especially.


Well here's to hoping that we ARE out of this mess even if it costs me my airbnb deposit.


That's unlikely at this point. Enough people ignored social distancing and still are not wearing masks that the powder keg is about to explode. There also will be a second wave.

The social distancing thing is subtle, it only takes a few outside of the bubble interactions to break the whole thing. Given the 2+ week lag we are still seeing the initial wave propagate and has not yet peaked.


I found COBRA to be extremely expensive. I instead enrolled in obamacare via job loss exception.


It sounds like it's saying that Airbnb will pay for COBRA for that duration.


Airbnb employee here-- this is the consensus.


If it is the case it seems out of context to refer to this severance benefit as COBRA as it is my understanding this program has been specifically designed by Congress to force employers to offer the "opportunity" for the separated employees to get health insurance at full cost (without the employer subsidy).

Since the Affordable Care Act, it seems to be cheaper to forego COBRA benefit and enroll in one of the offered options. Lost of job let you do so outside of the official enrolment period.


Nobody is stopping aribnb from paying the full cost of Cobra, after the option is provided as is legally obligated.

It is certainly not cheaper to forgo free COBRA and buy insurance on the exchange.


My read of that is that AirBnB is paying the premiums for the next 12 months, as regardless of what the company does all employees are eligible to stay on their employee plan and pay their own premiums for 18 months.


... COBRA is 36 months for California employees.


First X (12?) month are paid by Airbnb (ex-employer). After that layed off ex-employee can keep health insurance through CORBA but will have to pay from own pocket.


COBRA is the same as the plan you had with your company. Most companies pay half, some pay 75%, some pay 100%, so it can be a sticker shock to many.


"Beneficiaries then have 60 days to inform the administrator whether or not they want to continue insurance coverage through COBRA."

If you are paying for COBRA you are doing it wrong. You take those 60 days to find private insurance. You basically get 2 free months of health insurance since you cancel on that 60 day mark and never pay. If on day 58 you need health insurance you pay COBRA. Otherwise - your new private insurance kicks in on day 60.

[Yes! You could have history of heart attacks and not find cheaper private insurance but I am hoping that isn't you!]


> Yes! You could have history of heart attacks and not find cheaper private insurance but I am hoping that isn't you!

Major medical health insurance in the United States for the individual and small business markets has had community rating since 2008. That means health insurers are not able to take health history into account when setting rates. They can only set rates based on age and tobacco usage.


When I left my last job, I "lived" in Arizona. There was only plan on the Obamacare exchange there, and it was the same price as my employer's plan with much shittier coverage.


Back in the day, severance packages for white collar workers were close to one month per year served. My father received that from Kodak (Not once, but twice... He had the rare privilege of being laid off (From the same team, no less) in 2009, and then again in 2016. The severance package did not change much between each of his stints of employment.)

With that schedule, anyone who worked at AirBnB for four years or less looks to be in a similar position.


>Back in the day, severance packages for white collar workers were close to one month per year served.

in Korea this rule is in actual labour law. One month's salary for each year employed fulltime, for everybody.


4 years at Airbnb would be quite a long time.


My brother (in Australia) got that this year. 14 months severance after 14 years.


Yeah that's generous by most standards.


By most American standards


Where do you live that companies will give 14 weeks' severance pay to people who've only been there a year?


When Texas Instruments closed their offices in Nice (somewhere around 2016?), the package was one month per year worked. Most people had worked there for between 10 and 20 years. From what I heard, Hewlett Packard was even more generous when they shut down


In defence of the parent, I read days instead of weeks initialy.


"In many countries, the severance pay is a lump sum that increases with the employee’s tenure in the company and their wage level. In the Czech Republic, Denmark, Hungary, Italy, Lithuania, Poland, Portugal, Slovakia and Spain, employees with service of up to one year are entitled to severance pay (in most cases one month’s pay), while in Luxembourg employees have to have a minimum of five years within the organisation before receiving severance pay.

In France and Slovenia, employees with up to five years’ tenure are entitled to severance pay amounting to a maximum of one month’s pay; in Spain, the entitlement is 100 days’ pay for the same tenure."

AirBnB is giving laid off workers around 3 months of severance pay. How is that less competitive than what's given in Europe?


Less competitive no, rather similar to what most white collar companies give. Some go way beyond, ie my own when fired due to similar reasons (and not say criminal behavior) will add 1 salary per year worked. It can lead to some serious package for long timers. This ain't for some C-level managers only, but regular desk IT folks for example.

Now if they would be firing say 30-50% the rules might be different, this ain't part of any written contract, but they did so for all folks fired for last 10 years. But that's probably the best package I've ever heard of, regardless of location.


Yeah by most American standards, and also by most standards.


Well, average developer salary in Europe is around $70k vs $163K average at Airbnb.


What’s an example of a country where this isn’t generous?


In France "cadres" (managers, most devs etc) will still be payed for three months (while you can work another job at the same time and get double income then), plus of course all accrued vacation days, and some amount based on your seniority at the company and its activity sector.

After the three months most people will qualified for regular unemployment.

And until you start working at another company you still get healthcare from your former employer's provider.

edit: as it's weeks and not days for Airbnb I guess it's pretty similar then.


> edit: as it's weeks and not days for Airbnb I guess it's pretty similar then.

You mean France's is significantly worse (12 < 15 at a minimum of 1yr or less)? Did you see the accelerated vesting as well?


Germany, health care isn't even a question, three months notice is the norm. Plus some additional severance payments. Don't take the number for granted, but I think IIRC it is something like one month per year. Not sure anymore, so.

EDIT: Read days instead of weeks regarding AirBnB severance pay. That changes a lot, and it makes it a more than generous package by anyone's standards.


> Germany, health care isn't even a question

How does this mean? As in, it's provided by the state and therefore not a part of a severance package or as in German employers don't provide any? I'm not sure how to take this. If it's that the state provides it, then arguably AirBnb is being even more generous or possibly it shouldn't be included in the comparison. It's about what AirBnb is providing when discussing their generosity or lack thereof.

> IIRC it is something like one month per year.

So possibly way more generous or possibly way less generous depending. Under AirBnb's scheme, it's more generous so long as you've been employed less than 5yrs.

Not sure I'm seeing how German standards are so much more generous. Possibly that's fair under the healthcare standpoint but even then AirBnb is providing for a whole year so not really clear at all that that wouldn't cover an individual until their next role.


Health care is public, so worst case it is covered by the state. Also, just realized that AirBnB offer 14 weeks of pay. Initially read it as days... My fault. Being weeks, it really is a great package, health care or not. And even more so for the US with health care. All I can say is Kudos AirBnB.


~~Yes, because it's pretty shitty for Europe.~~

I didn't understand well, sorry.


"In many countries, the severance pay is a lump sum that increases with the employee’s tenure in the company and their wage level.

In the Czech Republic, Denmark, Hungary, Italy, Lithuania, Poland, Portugal, Slovakia and Spain, employees with service of up to one year are entitled to severance pay (in most cases one month’s pay), while in Luxembourg employees have to have a minimum of five years within the organisation before receiving severance pay.

In France and Slovenia, employees with up to five years’ tenure are entitled to severance pay amounting to a maximum of one month’s pay; in Spain, the entitlement is 100 days’ pay for the same tenure."

AirBnB is giving laid off workers around 3 months of severance pay. How is that less competitive than what's given in Europe?


It's not, people just love shitting on America. 14 weeks + 1 additional for each year served at US salaries + unemployment + paid health insurance for 12 months is extremely generous compared to the peanuts that Europe pays engineers.


Unless you realize that you're comparing severance package of one of top US companies to EU standard.


the original comment was specifically saying AirBnBs severance isn’t impressive compared to europe, which is not true.


AirBnBs severance package is impressive compared to rest of US.

Twisting words a bit: most of Europe doesn't get much worse severance than top US corporation. That's impressive.

IT in Europe also gets better severance etc.

Also, not checked in other countries, but in Poland for example: regular salaried employees get 3 month notice if tenure is 3+ years.


But this is already more than 3 months even with 1 month of tenure?


What you describe here as generous is pretty standard in my part of Europe, things like health insurance or unemployment benefits aren't even a concern to worry about. In fact, when fired, my company normally gives 3 months PLUS 1 month per year worked. Now that's what I call generous.


What part is that? And what's the average salary there? It's easy to give 6 months of severance when you're severely underpaying compared to global labor markets.


yup, it's better then what you would get in most of the europe.

does US have an unemployment plan. how long and how much do you get ?


> does US have an unemployment plan. how long and how much do you get ?

Each state has unemployment insurance. In most cases, the benefit amount per week/month puts you around the federal poverty line for an individual. No state has a severance requirement (although some do require your PTO balance be paid out as wages).

https://fileunemployment.org/unemployment-benefits/unemploym...


Yes. It depends on your salary, but given the current covid crisis, most airbnb technical employees are eligible for around $4200 per month for 26 weeks.


Yeah so severance is what you get from the company directly.

That counts as your usual pay. So during that time you don't get 'unemployment'. After the severance runs out then you collect unemployment, how much that is varies state to state.


then it's a little different in europe (afaik), you get your severance, it's one time payment but it's usually not that big. and you can right away get your unemployment payment. the length and the amount depends on how much have you worked and the pay you had. the one does not depend on the other.


My brother (in Australia, where I grew up, before moving to the US) recently got laid off from his firm (actually, I believe they were going out of business due to retirement or such). Their policy was 1 month severance per year. He'd been there 14 years, 14 months severance.


Do the employees have to work during these 3 months? It is not clear from the article. If not, it is quite "competitive".


It's not severance if you're working. Severance comes after you're not working.


Their last day is May 11th, so no they're not working. Otherwise it wouldn't be considered severance pay, that's basically just giving 3 months notice.


Oh right, it's before the state unemployment. Then I don't know.


What's the average for Europe?


afaik in some countries its not required (switzerland?) and in others it depends on the number of years the person worked in company. i think it depends on the country.


No severance pay required in Switzerland but there will be a mandatory one month to three months notice period. A company can decide to send their workers home earlier but they would still be required to pay salary for that period. Though when laying of 25% there will be some additional government requirements as it would be classified as a mass-layoff and will need a social plan.


“We had to let you go to pay for your severance package.”


That also means they have no expectation for the market to come back for at least 2 years.


Huh? Curious as to why that is.


Recruiting is expensive.


Free Apple laptop to boot. This must be an industry first.


Wow! 14 weeks of pay is freaking amazing. Add the other stuff on and...takes the sting out quite a bit. Bravo Airbnb.


This makes me think, they value their reputation a lot more than the greedy 'minimize losses' option. This way, they still save money over 2020, while hopefully hitting the ground running when the whole thing clears up.


Isn't there much better way? Many big cities are projected to start opening up in June. I would expect life coming back to normal around August end. So that's basically 4 months. Why not just keep paying instead of doing severance and lose all these well-trained talent? If you are doubtful if 4 months will be enough, you can still offer option of continued employment at 50% or 75% pay? I feel move like this tarnishes stability aspect of companies. Does anyone now want to sell their houses and move to where AirBnB is so they have their job in future?


I guess they expect a recession even afterwards, so that means reduced travel for potentially years.


Dropping the cliff period for new employees is pretty much useless. The equity/ESOPs new employees will be exercising will be of the last valuation price which would be already high, and after Covid-19, with the struggles of tourism industry as such the notional value would have fallen a lot. So if you exercise those significantly expensive options now, you would probably need to hold it for a long time and really believe that AirBnB can be where it was.


From some other comments it sounds like they're RSUs, not options.


Why do you need to buy the RSUs then? Don't you already get them once they vest.


I think there was a 1 year vesting cliff, so if you get laid off before a year you get your rsus prorated instead of getting nothing.


I moved to Canada for a job and month later disbanded,told my job went to India and not paid my outstanding wages. So yeah pretty generous.


What incentive does an employer have to give a generous severence?

Sure, there is a slight PR benefit, and you have slightly more chance of rehiring those employees later maybe, but as a shareholder it really seems to be throwing money away unless the severance package was agreed upfront when the employee was first hired (ie. as an incentive to join the company).


> Separated employees

Separated? Is this American english?


It's actually an HR(human resources) term. There's a standard document employees sign called a "separation agreement." See:

https://gusto.com/blog/people-management/employee-separation...


Companies go out of their way to use words that they hope will soften what is actually happening.

Separated almost sounds as if this was consensual.

That being said, Airbnb gets some credit for a decent severance.


Sounds like a weird new euphemism for laid off, designed to make it seem less negative.


Yeah that’s what I thought as well. The health insurance part is even more profound than the weeks of pay imo


Do employees have to waive filing unemployment to accept the severance package?

In California those can last up to six months.


No, California considers severance to be compensation for past work.


I don't think they're legally allowed to waive your unemployment insurance payout.


14 weeks pay, don't they just mean that you are on garden leave while given notice? That's quite common in Europe, have to admit the one year health insurance is a nice extra which is the first time I hear about it.


Allowing former new employees to buy shares in a private company essentially at cost doesn't seem terribly generous to me.


14 weeks is pretty good generous package IMO. Typically 6 weeks is standard so h1b employees could find another job.


Totally agreed. Those are very generous terms, no matter where in the world. Well done AirBnB.


It's generous, but I also wish it was normal.


I have never seen a more generous one.


Deleted


In parts of countries like Canada, the last part isn't particularly important, but it's not nothing. Typically, white collar employers cover, in part, or in full, medical insurance premiums that every resident is expected to pay. In BC, prior to the recent phase-out, it was ~$900/year. (That money now comes out of income taxes.)

Employers paying for that kind of benefit is either tax-advantaged, or just consistency of policy between their US, and Canadian offices. Not sure which.


Damn, deleted the comment to soon it seems... Agree, for the US it isn't to bad a package, especially considering the circumstances and the health care system. All the best for the affected people!


That's roughly equivalent to what anyone in France would get if they get fired


According to https://shieldgeo.com/terminating-an-employee-in-france-a-gu... it would rather be roughly 1 week pay per year of seniority.

However it is hardly comparable as unemployment benefits would kick in (on average 72% of your previous salary after taxes, maximum duration 24 months with decreasing amount). For instance if you worked 3 years and your annual salary was 80k, you could get a benefit of 57k over 12 months.


You get 3 month of mandatory notice period (if you had a "CDI" which is permanent employment) You get 1w/y on top of that.


there is a mandatory 3 months notice period


it's generous by startup standards, but laid off kickstarter employees are getting an even better deal because they unionized: four months full pay for everyone, up to six months of paid (not COBRA healthcare), recall rights if the jobs open back up, release from non competes

https://twitter.com/ksr_united/status/1256382357311012871


How is this an even better deal? About the same amount of pay, half the healthcare paid (COBRA healthcare is same plan). As for recall rights and release from non-competes, these are slightly better than nothing I suppose.


Since COBRA is always available to terminated employees, this announcement reads that AirBnb is paying for 12 months of health care.


ah you might be right. wording confused me.


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