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Hit by Amazon layoffs? Here's what you need to know about severance pay, PF, gratuity, and taxes
Amazon is set to lay off 30,000 corporate workers, about 10% of its staff, in its largest round of layoffs since 2022.
Amazon plans to lay off tens of thousands of its corporate workers this week, the largest layoffs since the company's largest firing of 27,000 workers at the end of 2022.
According to Reuters, the e-commerce behemoth managed by Andy Jassy plans to lay off up to 30,000 employees, or about 10% of its corporate staff, starting on Tuesday.
The staff reductions are part of a move to “pare expenses and compensate for overhiring during the peak demand of the pandemic,” as per Reuters sources. This comes ahead of Amazon's release of its recent quarterly earnings results on Thursday.
Approximately 10% of its 3,50,000 corporate employees in Amazon Web Services (AWS), operations, devices and services, and human resources will be affected by this move.
A number of other significant corporations, including TCS, Meta, Microsoft, and Google, have lately announced layoffs. Not only do job losses impact careers, but they also have significant financial and tax ramifications.
Amazon layoffs: Here's what workers need to know
Emergency fund: Your emergency fund should be one of your primary priorities. While looking for a new work, it can be easier to manage bills, rent, EMIs, and daily expenses if you have at least six to twelve months' worth of living expenses saved.
Gratuity: Under the Income Tax Act, a gratuity—extra money given to employees who have worked for five or more years—can received up to ₹20 lakh tax-free.
For workers in the private sector, the highest tax-exempt gratuity amount under Section 10(10) of the Income Tax Act is ₹20 lakh. It is completely excluded for state and the central government employees.
Severance Pay: Severance or notice pay, if offered by your employer, is fully taxed as part of your compensation. Therefore, it's critical that workers thoroughly read their contracts and comprehend any tax ramifications before signing them.
Provident fund: The Provident Fund (PF), to which both you and your employer make contributions, comes next. You can withdraw your PF if you quit your job.
To make life easier for EPF members, the Employees' Provident Fund Organization (EPFO) recently issued a number of new regulations. Members may withdraw up to 100% of their money in "special situations" under the updated regulations without giving a reason.
Additionally, in certain circumstances (such a pandemic, natural disaster, lockout, unemployment, etc.), members will be permitted to withdraw 100% of their money from their EPF accounts.
Under typical circumstances, members can only take out up to 75% of their EPF balance.
On October 15, 2025, EPFO issued a another statement stating that “75% of the eligible amount now withdrawable at any time without any documentation; full withdrawal also allowed under special situations.”
VRS reimbursement: The package for voluntary retirement schemes (VRS) may be tax-exempt up to ₹5 lakh. It must be submitted in the same tax year that you get your salary.
