Thread regarding Oracle Corp. layoffs

Don't rely on severance too much

If you think you're going to make out like a bandit with a severance, think again. The severance gets taxed in a big way, so you'll have a lot less money for your expenses. Also, if you plan to use COBRA to extend your medical benefits, be ready to pay huge monthly premiums. COBRA's high pricing is deliberately designed to discourage people of staying on it for very long.

If you decide to ride on the Titanic until it submerges in order to get your severance, you're taking a major risk. Best to jump off now into a lifeboat and get yourself a new, much better job. Oracle is heading to the junkpile.

Reposted from @2xyi+1iVOxRK3 since it's obvious that more people need to read this.

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Post ID: @OP+1iZsWUEe

6 replies (most recent on top)

I made a similar, but not as detailed post.
It is really pretty sad that so many hold themselves out as professionals, yet cannot understand the difference between withholding and actual tax.

Yes, the withheld amount is likely going to be higher than what most people pay normally on an equivalent amount. However, I am not sure if there would be any 401K amount taken, and pretty sure there would not be any ESPP taken, so I think the overall difference could be negligible.

With that said, being that this is an additional lump sum added at the end of the year, it is possible it could push someone into a higher marginal tax bracket, and their taxes could go up, but that is impossible to say without a lot of specific numbers.

Post ID: @2pda+1iZsWUEe

Severance is not much after tax
Cobra is too much
Unvested stock and 401k is gone
Life insurance is gone
Any unpaid loans you have on your 401k have to be paid off or taxed as a withdrawal in order to roll-over. This takes time, so start soon.
and Oracle requires you to rollover or get a fully taxed lump sum distribution of your 401k

The state exchange medical insurance is much cheaper, and you may be able to qualify for large state/govt discounts while you are unemployed (I did)
You may be able to get less expensive life insurance elsewhere

good luck

Post ID: @2ihh+1iZsWUEe

What the OP said is correct. My severance had 35% withheld, so what looked like a big severance ended up being a whole lot less. The OP’s point is that your severance won’t be some kind of big windfall like a Vegas jackpot. It won’t last long as you try to stretch it to cover your living expenses.

There is definitely a slowdown in hiring happening in IT right now, and with year end approaching fewer positions will be opened up. You should get job applications in now just in case you get hit in the next Oracle RIF. Don’t assume that you will quickly land another job after a RIF.

Post ID: @2ktj+1iZsWUEe

To add to what the person said above, the Cobra was a little over 2200 a month for me and my spouse. And for life insurance, they say you can port it over but that is not true so you lose it. It is a was a tough reality to find out after 20 plus years paying into this only to find out you are not able to port it over when you are older due to the rates. They will make you take a physical and the rate quoted was over $1,300 month. If you don’t take a physical due to health issues, they quoted over $12,000 a month. You read that right, $12k a month.

Post ID: @2vdg+1iZsWUEe

Tax laws in the US changed dramatically after 2018. You cannot choose the withholding of your sev payments, so YES there are scenarios where you will get less net and still need to pay at year end.

Unless you are at the Larry-Safra level. Remember his salary is $1. He makes his money thru means which are taxed at much lower rates, IF AT ALL.

Post ID: @1dhx+1iZsWUEe

It gets taxed no differently you monkey.

It all works out in the wash. You just pay it earlier and, if you file your taxes correctly it all comes out the same. Income is income and the tax rate, in the end, is the same.

Post ID: @1qaj+1iZsWUEe

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