Oracle layoffs offer a warning: 5 money moves to make before the pink slip arrives

Oracle’s latest round of layoffs have impacted software developers, managers and infrastructure engineers across its cloud infrastructure business, as the technology giant continues a wider restructuring exercise that has already resulted in thousands of job cuts.

According to a report by Business Insider, an internal document shows that 546 employees in Oracle’s America Cloud Infrastructure (ACI) organisation were affected by the latest job cut.

The leaked document was prepared to comply with the United States’ federal age-discrimination laws. The 546 employees represented about 7.6% of the 7,185 employees listed in the unit.

How can employees secure their finances?

This is not the first time a tech giant has announced layoffs in multiple phases. Some other companies such as Dell, Meta. Uber and Microsoft, have also cut jobs this year. In a climate of little to no job security, employees need to prepare in advance to ensure they can manage their expenses while looking for new opportunities if they lose their jobs.

Sebi-registered investment advisor and founder of Wealth Aligned Financial Advisory Harendra Zatakia shares five key money moves that employees can make to prepare for the worst. These include:

• Build a larger emergency fund: Employees who have high-risk jobs or work in industries facing restructuring, should build their emergency corpus before considering riskier investments such as mutual funds or stocks. The ideal target should be 9–12 months of essential expenses.
• Don’t let employer stock become your hidden risk: Employees with RSUs or ESOPs should remember that their salary and investments are already tied to the same company. Employer stock should ideally not exceed 10% of the investable portfolio, with gradual diversification to avoid double concentration risk.
• Protect the downside with adequate insurance: Before chasing returns, one should ensure adequate health insurance and life insurance, particularly if you have dependants or outstanding loans. Corporate health insurance benefits end the moment you leave the company.
• Keep fixed commitments manageable: Don’t convert a temporary high income into permanent high expenses. Employees should avoid taking large loans, car and housing commitments, or substantially upgrading your lifestyle simply because their compensation has risen over time.
• Understand the exit package before you need it: Employees should understand their notice period, severance terms, gratuity eligibility, leave encashment, RSU or ESOP vesting and exercise rules, as well as the tax treatment of their final settlement. These details can materially affect their cash runway after a job loss.

“The bigger lesson is that a pink slip should not be the event that starts financial planning. The best time to prepare for an income shock is when the salary is still coming in,” the investment and financial planning expert said.

What to know before building an emergency corpus?

Employees should calculate their emergency corpus based on essential monthly expenses, not their salary. This should include EMIs, rent, insurance premiums, school fees, household expenses and other unavoidable commitments.

“For someone in a high-paying but volatile technology role, I would rather see 12 months of expenses held in a sweep-in FD or liquid mutual fund, or other appropriate low-risk, liquid instruments, than an aggressively invested portfolio that may have to be sold during a job loss,” Zatakia advised.

He further warned that unvested stock is not an emergency fund, and vested employer stock should not be treated as cash simply because it is liquid. This only applies to employees who receive RSUs or ESOPs as part of their compensation.