How to negotiate a severance package when you're ready to leave

Most people negotiate their salary carefully and accept their severance package without reading it. This is exactly backwards. The salary negotiation happens at a moment of high competition, when you have limited leverage and the company has multiple candidates. The severance negotiation happens at a moment when the company has already decided to separate from you and simply wants to execute it cleanly. Your leverage, paradoxically, is often higher at exit than at entry.

Most tech workers don't know this. They receive a package, assume it's fixed, sign within 48 hours, and leave money — sometimes significant money — on the table. Here's what severance actually looks like in tech, what's negotiable, and how to approach the conversation without blowing it.

What the standard package actually contains

Before you can negotiate, you need to know what you've been offered and what each component is worth. A typical tech severance package has several parts, and most people only focus on the obvious one.

Weeks of pay. The most visible number. In tech, the standard formula is one to two weeks of base salary per year of service, often capped somewhere between twelve and twenty-six weeks. At a company paying $160,000 base, one week equals approximately $3,077. Two years of service at one week per year gets you $6,154. Two years at two weeks per year gets you $12,308. That gap — between the floor the company might offer and the ceiling you might negotiate to — is real money, and it compounds the longer you've been there.

Equity treatment. This is where significant value can be lost or saved and where most people focus least. The questions to understand: does your unvested equity accelerate on separation? Does it accelerate partially (double-trigger) or fully (single-trigger)? How long is your post-termination exercise window for stock options — the standard 90 days is almost always negotiable upward to six or twelve months, which can make the difference between being able to exercise or not. For a $120k RSU grant vesting over four years, an additional three months of acceleration is worth $7,500. For larger grants, the numbers are substantially bigger.

Healthcare continuation. COBRA continuation coverage for a family in the US costs between $1,800 and $2,200 per month in 2026. Some companies offer to continue covering your healthcare premium for the duration of your severance period; others simply extend your final day and leave COBRA costs entirely to you. This is a negotiable item that receives almost no attention and is worth, in dollar terms, anywhere from $900 to $13,200 depending on duration and whether it covers dependents.

Non-disparagement and non-compete scope. The agreement will contain provisions about what you can say about the company and, in some states, where you can work next. These are legal commitments with real implications. Non-competes are unenforceable in California and increasingly limited elsewhere, but the scope of what you're agreeing to matters regardless — a broad non-disparagement clause affects your ability to discuss your work experience publicly in ways that could affect your next role.

The timeline matters more than most people realise

Federal law under the ADEA (Age Discrimination in Employment Act) requires that employees over 40 be given 21 days to consider a severance agreement, plus 7 days to revoke after signing. Most companies apply similar timelines regardless of age — typically 21 days with a 7-day revocation window — because it limits legal exposure.

This matters because your first instinct when offered severance, particularly if the separation is unexpected, will be to sign quickly and get certainty. Resist this. The 21-day window is a genuine negotiating asset. Use it. The company wants the agreement executed; the longer it sits unsigned, the more uncomfortable they are. That discomfort is your leverage, and it's at its highest before you've signed anything.

What's actually negotiable — specifically

The mistake most people make is asking vaguely for "more" without specifying what. Specificity is essential here: you need to know what you're asking for, why, and what your alternative is if they decline.

The weeks of pay. Ask directly for more weeks. Frame it around tenure and contribution. "Given four years of service and the fact that I'm an individual contributor who won't be eligible for unemployment in some states, I'd like to discuss increasing the severance to three weeks per year rather than two." In my experience, companies with meaningful HR functions will often move by one to two weeks per year of service without significant resistance, particularly if the separation is a layoff rather than a performance issue. On a $150k base with five years of service, one additional week per year is $14,400. That's a conversation worth having.

The equity exercise window. Ask for an extended post-termination exercise window for vested options. The standard 90 days is frequently negotiated to 12 months, especially at companies that have gone through layoffs repeatedly and have developed standard extended-window terms. If you have significant vested options that are in the money, this can be worth considerably more than additional weeks of pay.

The healthcare bridge. Ask them to continue paying the employer contribution to your health insurance through the severance period or for a fixed additional number of months. In practice this costs the company relatively little — they've often already paid for the full month regardless — and it removes a real cost from your side during a period when your income is uncertain.

Reference terms. Get explicit written agreement on what will be said in reference checks — specifically who the reference goes to, what the content is limited to, and whether any performance documentation from your personnel file will be shared. A signed agreement on this is worth more than an informal conversation.

Outplacement support. Many companies offer outplacement services. If yours hasn't, ask. These range from purely nominal (a LinkedIn Premium subscription) to genuinely useful (a career coach for 90 days). They cost the company little; for you they can reduce the job search by several weeks.

How to have the conversation without damaging the relationship

The fear most people have about negotiating severance is that pushing back will produce a hostile response — that the company will rescind the offer or treat them badly on the way out. In practice, this is rare. Companies have strong incentives to execute separations cleanly. A hostile or litigious departure creates legal exposure, internal morale problems, and reputation risk. What they want is a signed agreement and a smooth exit. Asking for more, professionally and specifically, almost never changes that calculus.

The framing that works best is matter-of-fact rather than adversarial. You're not angry. You're evaluating the package and identifying a few areas you'd like to discuss. You're doing this because the severance period represents real financial exposure for you and you want to make sure you've understood what's possible.

In concrete terms: respond to the offer in writing, not verbally. Acknowledge receipt. State that you're reviewing the agreement carefully and plan to respond within the 21-day window. Ask two or three specific questions. Then, separately or simultaneously, make your specific requests. Keeping it in writing creates a record, reduces the emotional temperature, and allows both sides to respond thoughtfully rather than reactively.

What you should never do: threaten legal action speculatively, make demands that are clearly unrealistic relative to the package offered, or be contemptuous about the company or the people handling the separation. None of these make you more money and all of them make the other side less inclined to move.

When the separation is a PIP, not a layoff

Performance improvement plans in tech function as pre-termination documentation more often than as genuine development tools, and most people who are put on them understand this quickly. The dynamics of negotiating severance off a PIP are different in ways worth understanding.

Your leverage is lower, but it exists. The company still wants a clean, signed separation agreement. If you sign, they get certainty and protection from wrongful termination claims. If you don't sign, they face ongoing legal exposure and, in some jurisdictions, may still owe you unemployment benefits regardless. These are real considerations on their side of the table.

The most effective approach in a PIP situation is usually to focus your negotiation narrowly — one or two specific asks rather than a comprehensive counterproposal — and to resolve it relatively quickly. Extended PIP negotiations tend to produce diminishing returns and mounting stress. Get what you can on the most important items and execute the exit cleanly.

The numbers people actually leave on the table

To make this concrete: I've talked to enough people going through tech separations to describe a fairly typical scenario. A software engineer, five years at a Series B company, $170,000 base salary, offered two weeks per year of service (ten weeks, approximately $32,700), standard 90-day option exercise window on vested options with a $40,000 spread, COBRA costs absorbed by the employee.

If that engineer negotiates: three weeks per year (fifteen weeks, roughly $49,000), a twelve-month exercise window, and three months of COBRA continuation at approximately $900 per month — the adjusted package is worth around $54,700 in direct financial value, plus the optionality of the extended exercise window. The difference from the first offer to the negotiated outcome is approximately $22,000. The negotiation takes two emails and a single phone call.

Not every negotiation produces this outcome. Some companies don't move. Some offers are already at the high end of their internal bands. But the number of people who leave money in this range on the table — because they didn't know it was negotiable, because the emotional weight of the separation made asking feel impossible, because they signed within 48 hours to get certainty — is substantial. The ask costs you almost nothing. The cost of not asking is real.

If you're navigating a separation and trying to work out what your options look like more broadly, the runway and financial planning article has more on how to think about the gap between your last paycheque and your next income source — and what that calculation actually requires.