There are cutbacks in IT and I have been laid off, how much do I have to be compensated?
With rising interest rates, Tech companies see that they have hired above their means. If you've been laid off, find out how to protect your rights, check your severance pay, and don't leave with one hand in front of you and one hand behind.
Javier Caldito
3/4/20244 min read
!Where we are!
262,995 people laid off in a total of 1,191 technology companies during 2023, almost 50,000 in 186 companies so far in 2024. These data are just a small sample of what is happening in the IT sector, and, mind you, only in the United States.
The rise in interest rates in the West, to reduce inflation, has awakened companies from their slumber. Chief Financial Officers have been the first to tell Human Resources that hiring a lot because money is cheap is no longer a reality. There is no economic growth without long-term sustainability, so it's time to make cuts in the workforce.
It doesn't matter how many years you've been with the company, how much overtime you've been punching keys, how much merchandising and mugs with the corporate logo you have parked on your desk. If the manager considers that you contribute less than you cost, he will wish you the best but will take you out of the payroll.
But I've been with the company for many years, they've spent a lot of money on the project, they believe in the launch and its success, I'm indispensable, etc!
Wake up, none of that is going to protect you. You are not indispensable, the company thinks that if they make a mistake by firing you, they will be able to hire someone in the future who will do the same thing, even cheaper.
And even so, if they spent a lot of resources on the product you developed, they can always throw it away to deduct losses and pay less taxes. The corporate world is just a game, an eternal balancing of accounts and results.
You are on your own, and while you are looking for a new job, you will have to protect your interests so that the company from which you have been fired leaves you with nothing more than the hours they have paid you and some notch on the chair.
The dismissal is the early termination of the contract, regardless of whether the contract was indefinite or with a termination date. When the company fires you, it breaks the agreement it had with you, therefore, it has to compensate you.
Important, the indemnity is not what is popularly known as “aguinaldo” or “finiquito”, that is, the unpaid overtime and the vacations not enjoyed, but it is an additional amount. The severance pay can NEVER be denied.
The indemnity for unfair or unjustified dismissal or without cause (the three forms represent the same thing, only the way of calling it changes in each country) is calculated as a monthly payment or percentage of monthly payments of your last paycheck.
In Mexico the indemnity is three months of salary according to article 48 of the Federal Labor Law.
In Argentina one month's salary for each year of seniority or fraction greater than three months, considering the best remuneration of the last year (or the time of service if this is less) according to article 245 of the Labor Contract Law.
In Spain the indemnity will be 33 days of salary for each year worked with a limit of 24 payrolls according to article 56 of the Workers' Statute.
Compensation for unfair dismissal
Evidently, the company wants to pay the minimum, or even not pay if it can. Therefore, the company will allege that there is some cause that justifies the dismissal, without you realizing it, because the justified dismissal does not entail compensation, or even worse, they will make you sign a blank sheet to use it as your resignation and not pay you anything.
Check the causes of dismissal with cause in the Labor Law of your country, they are closed causes, so it is not worth that the company invents it, if it does not allege what the law considers as cause is unfair dismissal. Here is a summary, although there may be more:
1 Stealing, 2 Insulting and assaulting co-workers or bosses, 3 Habitually going drunk, 4 Not going to work or repeatedly and continuously arriving late. If you are dismissed on these grounds, keep the paper they give you to notify the dismissal and go to Conciliation immediately because they are stealing from you!
"Human Resources seems soo confident"
Lay-offs due to lack of funding
Objective dismissal for economic, technical or productive reasons. This form of dismissal does not exist in equivalent form in all Spanish-speaking countries.
In short it means that there is no cause that justifies your dismissal (Congratulations, you are not a drunk), but the company needs to fire you because it has no money to pay the payroll.
It seems honest, plus you will get a severance pay, although less than for wrongful termination. But be careful, just because the company says they don't have money doesn't mean the company doesn't have money.
If you know how to complain and you catch them, you will be entitled to the full severance pay.
AND MUCH MORE
If you want to know more about :
How to challenge an objective dismissal
Protect yourself from non-competition covenants that you were made to sign and that prevent you from working in the sector.
Protect Intellectual Property rights that you generated during the job and much more.
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