Have you ever thought of transforming a redundancy into a pay rise and a bonus?

In recent years I have been made redundant a few times. Here is my story and what I’ve learnt.

In summer 2014 I was approached for a job at one of my dream companies. I was truly excited when they offered me the job, and was also happy to get a 10% pay rise by moving to a new employer!

Seven months into the job, the company was acquired by a large and successful multinational company, one which I have been watching with interest over time. Following the initial surprise and confusion, we were told that we would get a 10% pay rise and equity – and everyone relaxed.

The 10% pay rise was valid for all employees globally of the acquired company (approx. 550 staff); my share of equity was almost twice my gross yearly salary and was spread over 4 years in the form of a staff retention mechanism. And of course we now had access to mind-blowing benefits!

We all followed closely all developments. Then fours months later my whole team was told all our roles were going to be penned out. We had to leave this interesting and generous company! A couple of people managed to move internally and relocated to stay at that employer.

Although under UK law I would not have been entitled to any redundancy pay, my employer decided to pay me out a redundancy of 8 times my net salary! That is like a good bonus! Unfortunately I had to leave the equity behind as it was meant to be a retention mechanism, but the redundancy pay made up for the loss.

I moved on to another interesting company – pocketing again a 10% pay rise. One year later… part of this company was sold on to another one, and my job was one of the few that had to go.

This time it came a bit as a shock because I was on maternity leave, my daughter was only 4 weeks old when the communication arrived. But on the bright side, after pocketing two months of fully-paid maternity leave, my departure paperwork was signed and I was given my redundancy pay out: 18 times my net salary! It was particularly high as by law they had to pay me out all the holiday I would have accrued during my maternity leave, missed pension contributions, etc.

This allowed me to spend almost a year with my daughter without worrying about money, till I was approach for a new, interesting role.

I have learnt a great deal from this experience:

Learnings

  • All of the companies involved are California tech companies. I strongly believe that they acquire and get acquired more frequently than other types of companies, so chances of redundancy are higher.
  • They also tend to pay more if you lose your job, because, in a way, they just want to get on with business…

Pros and cons of being made redundant

Pros

  • Financially very lucrative:
    • In 18 month I got 3 times a 10% pay rise PLUS two generous redundancy packages.
    • In the UK the first £30,000 redundancy pay are tax free. Because I was made redundant twice, I was able to take advantage of this tax break twice.
  • Unique insights into tech companies and the Mergers & Acquisitions world.

Cons

  • It is not predictable. My husband teases me that I have ‘a good business model’, but both times I fell into it. However if you never change employer, you’ll struggle to be in the right place at the right time and get lucky.
  • It can cause insecurity and trust issues, it is not the right thing for everyone.

It has been stressful at times, but I see the positives. In the meantime, I have decided I needed something different and set up my own independent consulting business. I am now my own boss and enjoy the flexibility as well as the financial advantages of being a contractor.

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