RSUs and stock options after a tech layoff

Start here

• Locate your equity grant agreement documents.
• Confirm your last day of employment in writing.
• Note your vesting schedule and any unvested amounts.
• Note your post-termination exercise window (for stock options).
• Do not sign severance language about equity without understanding the implications.

Vested vs unvested equity

• Vested equity is yours regardless of separation. Unvested equity typically forfeits unless your agreement says otherwise.
• Severance packages sometimes accelerate vesting for some or all unvested grants. This is negotiable in some cases.
• Some agreements have "double trigger" acceleration (acceleration only if both a change of control AND termination occur).

RSUs (Restricted Stock Units) after a layoff

• Vested RSUs are typically delivered as shares on your last day or per your grant schedule.
• Unvested RSUs generally forfeit unless severance includes acceleration.
• Tax: RSU delivery is typically a taxable event. Withholding may have occurred, but you may owe additional tax depending on your bracket.
• Document the fair market value of delivered shares for tax reporting.

Stock options after a layoff

• Vested options remain exercisable for a limited window after termination (the post-termination exercise window).
• Common windows: 90 days for ISOs (statutory limit), 30 days to 10 years for NSOs depending on plan.
• After the window closes, vested options expire.
• Tax: Exercise of NSOs creates ordinary income. Exercise of ISOs may create AMT exposure. This is a critical area for tax planning.

Post-termination exercise window

• Find this number in your stock option agreement. Common: 90 days.
• Calculate the deadline based on your last day, not your separation announcement date.
• If you cannot afford to exercise within the window, your options expire worthless.
• Some companies have extended this window during recent layoffs. Verify yours.

Severance and equity acceleration

• Severance packages may include accelerated vesting of some or all unvested grants.
• This is often negotiable, especially for higher-level employees or in mass layoff situations.
• Acceleration changes the tax timing.
• Get any acceleration in writing before signing. See our severance prep guide for related review topics.

Tax and cash-flow considerations

• Equity events on or near separation can compound tax exposure.
• Withholding may be insufficient — plan for additional tax owed at filing.
• Consider quarterly estimated tax payments if your equity event is large.
• AMT exposure for ISOs is a separate calculation from regular income tax.
• Consult a CPA or qualified financial advisor familiar with equity compensation.

Questions to ask HR before signing severance

• What happens to my unvested RSUs on my last day?
• Will any vesting accelerate as part of the severance package?
• What is my post-termination exercise window for vested options?
• Where can I access my grant agreements and equity plan documents?
• Are there different rules for termination without cause vs. termination for cause?
• Will equity treatment be confirmed in writing in the severance agreement?

For broader HR-conversation prep, see our HR questions guide.

Questions to ask a financial or tax professional

• What is the tax impact of my equity vesting and any acceleration?
• Should I exercise options within the post-termination window, and if so when?
• Am I at risk of AMT exposure from ISOs?
• How should I report equity events on this year's tax return?
• Are there state tax considerations specific to my situation?

Cash from a vested-RSU event also changes your runway estimate — but the tax owed on it does too, so plan both sides.

What this guide does not cover

• Specific buy/sell/exercise recommendations for your situation.
• Tax planning specific to your income, state, and family situation.
• Legal analysis of your equity agreement language.
• Negotiation tactics for individual severance terms.

For these, consult a qualified financial advisor, CPA, or attorney licensed in your state. For broader tech-worker layoff preparation, see our layoff help for tech workers hub.