By: Stephanie McDonald and Baljinder (Bal) Singh Tiwana
The tech industry moves fast—and so do layoffs. Companies hire aggressively during growth periods and cut just as quickly when conditions shift. Fuelled by venture capital, market pressure, AI investment, and a “hire fast, fire fast” culture, teams are often built ahead of demand—and dismantled just as fast when priorities shift. Heavy investment in AI is accelerating this cycle, shifting workforce needs towards smaller, more specialized roles.
Real-World Example: The AI Restructuring Wave
Oracle is cutting thousands of jobs globally in a major AI-focused restructuring. It is reported that Oracle plans to spend a colossal $2.1 billion in 2026 on restructuring, mostly covering severance and exit costs. These job cuts could reduce an estimated 18% of Oracle’s global workforce, a figure which is staggering.
Oracle is also part of the Stargate Project, a multibillion-dollar AI infrastructure initiative with partners like OpenAI and SoftBank, and Oracle. The project highlights how companies are redirecting their resources towards AI and automation, often at the expense of jobs. Experts expect other tech firms to follow suit, shifting dollars to AI investment and specialized talent, while reducing jobs.
Your Severance Offer May Be Undervalued
If you’re a tech worker, don’t fall for the common trap of “you have 48 hours to accept this offer.” Employers often pressure employees to sign quickly, hoping you won’t take the time to review your legal rights. Beware, rushing into a decision may cost you thousands of dollars.
Employers frequently present lowball severance offers designed to close matters quickly and cheaply. These offers typically reflect Employment Standards Act (ESA) minimum entitlements, not your full legal entitlement. Accepting too quickly could leave thousands of dollars on the table.
The Employment Standards Act
The ESA sets your minimum entitlements— i.e. the floor, not the ceiling. Initial offers often reflect only ESA minimum requirements, not the potential common law entitlements, which could be far higher.
Common Law Entitlements
Under common law, the Courts assess reasonable notice based on factors known as the Bardal factors, including:
- Age and experience
- Seniority and length of service
- Position and level of responsibility
- Ability to find comparable employment
If your employment contract does not limit your entitlements, common law notice can be months, or even over a year of pay. For example, instead of 8 weeks under ESA, you could be entitled to 8 months or more, depending on your circumstances.
Courts assess these factors contextually, and no single factor is determinative. Tech employees in specialized or senior roles often earn high remuneration, and finding comparable employment can be more difficult. As a result, they are typically entitled to longer notice periods. Each case is evaluated individually, taking into account the employee’s role, compensation, and prospects for re-employment.
Employment Contract Considerations
Your contract may include a termination clause limiting severance to ESA minimum entitlements. Courts will enforce these clauses only if they are clear, unambiguous, and ESA-compliant. Poorly drafted clauses are often unenforceable, giving employees more leverage than they realize. Thus, it is fundamental to get an employment lawyer to review your contract ASAP, prior to you accepting any offer.
Know Your Rights Before You Agree to Any Offer: Steps to Take When You Receive a Severance Offer
- Do not sign immediately. Take time to review the offer carefully.
- Check what’s included. Confirm salary, bonus, benefits, vacation, and severance pay.
- Assess your common law entitlement. Consider your age, seniority, and market conditions.
- Seek legal advice Immediately. An employment lawyer can determine if the offer is fair—or if you are likely entitled to more.
- Negotiate. Initial offers are rarely final
Conclusion
Tech layoffs are accelerating, and AI is reshaping workforces in Ontario, and globally. Your severance package may be significantly undervalued. Know your rights, review your employment contract, and get legal advice before signing—don’t leave money on the table. Stand firm and protect your entitlements.
Workplace Sage Legal can help you determine whether you may be entitled to a higher payout under common law. If you need assistance reviewing your employment contract or negotiating a better severance package, book a consultation today.
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Learn more about employment law through the articles below:
- Who is entitled to Reasonable Notice, and how is it calculated?
- Ontario Severance Packages: Why You Should Almost Never Accept the First Offer
- Termination of Employment in Ontario: Your Legal Guide for Provincial and Federal Employees
DISCLAIMER: This article/blog is provided for educational/informational purposes only. This blog does not constitute legal advice. Do not rely on any advice before speaking with a lawyer. This blog does not form a solicitor-client relationship.
