How to Negotiate a Better Severance Package (2025 Guide)

Most people don't realize that severance packages are negotiable. If you've just been laid off, you may be able to get more than the initial offer—but you need to know how to ask.

This guide walks you through the severance negotiation process, what to ask for, and how to do it professionally.

First: You Have Time

Before we dive in, remember:

• Don't sign anything on the spot. You typically have 21 days to review (45 days if over 40 in a group layoff).
• Take the paperwork home. Say "Thank you, I'd like to review this before signing."
• The first offer is rarely the final offer. Companies expect some negotiation.

What's Typically in a Severance Package?

Standard severance packages may include:

Component	Typical Amount
Severance pay	1-2 weeks per year of service
Health insurance	1-3 months COBRA paid or subsidized
Unused PTO	Paid out (sometimes required by law)
Bonus	Prorated or full, if earned
Stock options	Extended exercise window
Outplacement services	Resume help, career coaching
Reference	Neutral or positive reference agreement

What Can You Negotiate?

Almost everything is potentially negotiable. Focus on these areas:

1. Severance Pay Amount

Standard: 1-2 weeks per year of service

What to ask for:

• Additional weeks based on tenure
• Matching what you've heard others received
• Enough time to realistically find a new job

Script:

"Given my [X years] of service and contributions to [specific achievements], I was hoping we could discuss extending the severance to [X weeks]. I understand the company is going through changes, and I want to transition professionally. Would [X weeks] be possible?"

2. Health Insurance Coverage

Standard: COBRA information only (you pay full cost)

What to ask for:

• Company pays COBRA premiums for 3-6 months
• Lump sum for health insurance costs
• Extended coverage through end of month + additional months

Script:

"Health insurance is my biggest concern right now. Would the company consider covering my COBRA premiums for [3 months] while I search for new employment? Or providing a lump sum equivalent?"

3. Bonus and Commission

Standard: Forfeited if not yet paid

What to ask for:

• Prorated bonus for time worked
• Full bonus if close to payout date
• Commissions on deals you closed or influenced

Script:

"I understand my bonus wouldn't typically pay out until [date], but I worked toward these goals all year. Would the company consider a prorated bonus for the work completed?"

4. Stock Options/Equity

Standard: 90 days to exercise vested options

What to ask for:

• Extended exercise window (12+ months)
• Acceleration of unvested shares
• Clarity on what happens to RSUs

Script:

"I have vested options that I'd like to exercise, but I may not have the cash to do so within 90 days. Would the company consider extending my exercise window to 12 months?"

5. Non-Compete Clauses

Standard: Often included in severance agreements

What to ask for:

• Complete removal of non-compete
• Narrower scope (specific competitors only)
• Shorter duration
• Geographic limitations

Script:

"I'm concerned the non-compete clause may significantly limit my job search. Would the company consider [removing it / limiting it to direct competitors / reducing the duration to 6 months]?"

6. Reference and Recommendation

Standard: Company may only confirm dates and title

What to ask for:

• Positive reference from manager
• Agreed-upon language for inquiries
• LinkedIn recommendation
• Written recommendation letter

Script:

"Could we agree on reference language? I'd appreciate having my manager provide a reference, or at minimum, an agreed-upon statement about my departure being due to restructuring."

7. Outplacement Services

Standard: Sometimes included, often basic

What to ask for:

• Professional outplacement services
• Career coaching sessions
• Resume writing services
• Cash equivalent if you don't want services

Script:

"Would the company be willing to include outplacement services? I'd like help with my job search. Alternatively, I'd accept a cash equivalent if outplacement isn't available."

8. Announcement and Timing

Standard: Company controls messaging

What to ask for:

• Input on internal announcement
• Ability to send your own goodbye message
• Delay of announcement to give you time to network
• Agreement that it's communicated as a layoff, not termination

Script:

"I'd like to have some input on how my departure is communicated internally. Could we agree that it will be described as a layoff due to restructuring?"

How to Negotiate: Step by Step

Step 1: Review the Offer Carefully

Read every word. Look for:

• What you're giving up (release of claims, non-compete, non-disparagement)
• What you're getting (pay, benefits, timeline)
• Deadlines and conditions

Step 2: Research What's Reasonable

Find out:

• What others at your company received
• Industry standards for your role/tenure
• What leverage you might have

Step 3: Prioritize Your Asks

Don't ask for everything. Identify your top 2-3 priorities:

• What do you NEED?
• What would be NICE to have?
• What's a STRETCH?

Step 4: Make Your Case

When you negotiate:

• Be professional and courteous
• Focus on your value and contributions
• Make reasonable requests
• Offer justification for each ask

Step 5: Get It in Writing

Any agreed-upon changes must be added to the severance agreement in writing before you sign.

Sample Negotiation Email

Subject: Severance Agreement Discussion

Dear [HR Contact/Manager],

Thank you for the severance offer and for giving me time to review it. I appreciate [company's] approach to this difficult situation.

After careful consideration, I'd like to discuss a few items:

1. Severance Pay: Given my [X years] of service and [specific contributions], I'm hoping we could extend the severance to [X weeks].

2. Health Insurance: I'd like to request that the company cover COBRA premiums for [3 months] to help during my transition.

3. Non-Compete: The current clause may significantly limit my job search. Would you consider [narrowing the scope to direct competitors / reducing the duration]?

I'm committed to a smooth transition and will complete all handoff documentation. I'm available to discuss these points at your convenience.

Thank you for your consideration.

[Your name]

When to Involve a Lawyer

Consider consulting an employment attorney if:

• The severance is substantial (multiple months of pay)
• You're releasing significant claims (discrimination, wrongful termination)
• There's a restrictive non-compete
• You're over 40 (special ADEA protections)
• The agreement is complex or confusing
• You suspect discrimination or retaliation

Many employment attorneys offer free consultations and can review your agreement for a few hundred dollars.

What to Avoid

❌ Don't threaten litigation unless you're prepared to follow through

❌ Don't badmouth the company during negotiations

❌ Don't make ultimatums unless you're ready to walk away

❌ Don't delay endlessly — negotiate promptly and professionally

❌ Don't sign without reading every word

What If They Say No?

Sometimes the company won't budge. You can:

1. Accept the original offer (it's still better than nothing)
2. Ask for something else of lower cost to them
3. Walk away (rare, and risky)

Remember: A severance package isn't guaranteed. If negotiations fail, you may still want to sign and move on.

Leverage Points

You may have more leverage if:

• You have knowledge critical to ongoing projects
• You're needed for transition/handoff
• There are potential legal claims (discrimination, etc.)
• You're being asked to sign a broad release
• Others in your position received more
• You're a long-tenured employee
• You have a previously documented positive record

Quick Reference: What to Ask For

Most valuable:

1. More severance pay
2. Extended health insurance
3. Removal/modification of non-compete

Also worth asking: 4. Prorated bonus 5. Extended stock option exercise window 6. Positive reference commitment 7. Outplacement services 8. Input on departure announcement

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Final Thoughts

Negotiating severance feels uncomfortable, but it's completely normal and expected. Companies build negotiation room into their initial offers. The worst they can say is no.

Be professional, be reasonable, and advocate for yourself. You've earned it.

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Related Resources:

• What to Do When Laid Off →
• First 24 Hours Checklist →
• Understanding Your Legal Rights →