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Redundancy by sectorTechnology redundancy: your rights, pay and settlement agreements
Tech layoffs, share option and RSU treatment, restrictive covenants and how settlement agreements work when you are made redundant from a technology role.
Technology companies, from early-stage startups to large employers, have gone through repeated rounds of layoffs in recent years, often run as formal redundancy or at-risk consultation processes affecting whole teams or functions at once. Pay packages in tech frequently include share options or RSUs alongside salary, which raises additional questions on redundancy about vesting schedules, exercise windows and what happens to unvested equity. Restrictive covenants covering confidentiality, non-solicitation and sometimes non-competition are also common, particularly for senior or engineering staff with access to sensitive product or customer information. Settlement agreements are frequently used to formalise tech redundancies and to agree treatment of equity and covenants together.
Key points
- Tech layoffs often run as formal at-risk consultation processes affecting whole teams at once.
- Unvested share options or RSUs need separate review alongside any redundancy payment.
- Enhanced redundancy terms above the statutory minimum vary widely between tech employers.
- Confidentiality and non-solicitation covenants are common and often addressed in the settlement agreement.
Settlement agreements in technology
Settlement agreements are common in technology sector layoffs, particularly where redundancy is combined with negotiation over unvested share options or RSUs, exercise deadlines, and confidentiality or non-solicitation covenants. Because equity terms are often governed by separate plan rules rather than the employment contract itself, it is worth having both documents reviewed together. As with any settlement agreement, independent legal advice is required before it is binding, and the employer usually meets the cost of that advice.
Been offered a settlement agreement?
If your technology employer has offered you a settlement agreement as part of a redundancy, we will review it the same working day and tell you honestly whether the offer is fair. Free to you when your employer pays our fee, which is the case in nearly every UK settlement agreement.
Technology redundancy: frequently asked questions
What happens to my share options if I am laid off from a tech company?
It depends on the specific option or RSU plan rules, which typically set out exercise windows after leaving and what happens to unvested awards. Some plans accelerate vesting on redundancy, others do not, and exercise deadlines can be short, so this needs urgent review alongside your redundancy terms rather than being left until after you sign anything.
Am I entitled to more than statutory redundancy pay in tech?
Not automatically. Unless your contract or company policy provides for enhanced redundancy pay, the statutory minimum applies, though some larger tech employers running bulk layoffs offer additional ex-gratia payments as part of a settlement agreement. Whether an enhanced offer is reasonable for your service and role is worth checking before accepting.
Do non-solicitation clauses in my tech contract still apply after redundancy?
Yes, if they are reasonable and properly drafted, restrictive covenants generally survive redundancy and can restrict contacting former colleagues or clients for a period. Settlement agreements sometimes address these covenants directly, either confirming or varying them, so it is worth checking this alongside your severance payment.