Do you lose unvested RSUs when laid off?

Yes, in most cases unvested RSUs are forfeited when you are laid off. The company keeps the unvested shares — which is a significant financial loss if you were near a cliff or large tranche. However, you may be able to negotiate accelerated vesting (getting the next tranche or a portion of unvested shares) as part of your severance agreement, especially if you are senior, have high-value unvested equity, or are in a group layoff where the company wants clean exits.

How long do you have to sell vested RSUs after a layoff?

Most equity agreements give you 90 days after termination to sell vested RSUs (shares that have already been issued to you). Some agreements are shorter (30-60 days) or longer. Immediately check your equity agreement and your brokerage account. RSUs that have vested are already yours — they are shares of stock in your account. You can hold or sell them on your own timeline, market conditions permitting, subject to any trading windows or lockup agreements specified in your equity plan.

Are RSUs taxed when you are laid off?

RSUs that vested before your layoff have already been taxed at vest — you owe no additional income tax on them, only capital gains tax if you sell at a higher price than the fair market value at vest. RSUs that vest as part of an accelerated vesting agreement are taxed as ordinary income at the fair market value on the vesting date. If your layoff includes a severance RSU acceleration, expect a significant W-2 income addition in the year of layoff.

What Happens to RSUs When You Are Laid Off? (Vesting, Taxes & Strategy)

RSUs are often worth six figures for tech and senior employees — and losing unvested shares in a layoff can hurt worse than the income gap. Here is exactly how RSUs work at termination, and how to protect your equity.

RSU Basics: Vested vs. Unvested

Status	Definition	What Happens at Layoff
Unvested RSUs	Shares you were promised but haven’t earned yet	Forfeited — gone in most cases
Vested RSUs (shares in account)	Shares that already vested and were delivered	Yours to keep — already in your brokerage account
Vested but restricted	Vested but under a lockup or trading window	Yours, but may have temporary sale restrictions

RSU Vesting Schedules (What You Might Lose)

Most tech company RSUs vest over 4 years with a 1-year cliff:

Year	Typical Vesting (4-year / 1-year cliff)	Notes
Month 1-11	0% vested	Below the cliff — forfeit everything if laid off here
Month 12 (cliff)	25% vested	First tranche; everything before this is gone if laid off before here
Month 13-24	+25% over the year (monthly or quarterly)	Graded vesting continues
Month 25-36	+25% over the year
Month 37-48	+25% over the year	Fully vested

If you are 11 months in with a $200,000 grant: Laid off one month before your cliff = $0 from that grant.

If you are 2.5 years in with a $200,000 grant: You’ve vested ~$125,000 (62.5%), forfeiting ~$75,000.

What to Negotiate: RSU Acceleration

RSU acceleration is the most financially significant thing to negotiate in a layoff — and most people don’t try.

Type of Acceleration	Definition	Common Triggers
Single-trigger acceleration	Vesting speeds up on one event (termination)	Rare in standard employment; found in executive agreements
Double-trigger acceleration	Vesting speeds up on two events (acquisition + termination)	More common; protects against acquisition-followed-by-layoff
Negotiated partial acceleration	You negotiate for next tranche or X months of unvested shares as severance	Possible if senior or large unvested balance

How to Negotiate RSU Acceleration in a Layoff

Situation	Negotiation Leverage
Near a cliff (within 60-90 days of vesting tranche)	“I’m 8 weeks from my vesting date — can we accelerate that tranche?”
Large unvested balance	“The unvested equity represents $X — I’d like to discuss including partial acceleration in my severance”
Senior employee / hard to replace	Your leverage is highest
Group layoff (WARN Act territory)	Company wants quick, clean exits — good leverage for negotiation
Performance-based termination	Leverage is lower; acceleration less likely

Tax Treatment of RSUs at Termination

RSU Event	Tax Treatment
RSU vests while employed	Taxed as ordinary income at FMV on vest date (already on your W-2)
Shares in account when laid off	No new tax event — you already paid income tax when they vested
You sell vested shares after layoff	Capital gains tax on the difference between sale price and FMV at vest
Accelerated vesting as part of severance	Taxed as ordinary income at FMV when those shares vest under acceleration
Unvested shares forfeited	No tax consequence — you never received them

Capital Gains on Shares You Already Held

If shares vested at $50 and you sell them for $65 after layoff:

Holding Period	Tax Rate on $15 Gain
Held less than 1 year (short-term)	Ordinary income rate (22-37%)
Held more than 1 year (long-term)	0%, 15%, or 20% (based on income)

If you have vested shares, consider how long you’ve held them before deciding to sell.

What to Check in Your Equity Agreement

After a layoff, review these documents immediately:

Document	What to Look For
Equity Award Agreement	Your specific vesting schedule, cliff dates, acceleration clauses
Equity Plan Document	General rules for all grants; what happens at termination
Separation Agreement / Offer Letter	Whether acceleration is offered as part of your severance
90-Day Post-Termination Exercise Window	RSU shares auto-deliver; not the same as stock options — but check
Trading Window Policy	Check if a quiet period prevents immediate sale

RSUs vs. Stock Options: Different Rules

Feature	RSUs	Stock Options
What you receive at vest	Shares (automatic)	Right to buy at strike price
Intrinsic value at layoff	Always positive if stock has any value	Only positive if stock > strike price
Expiration after termination	Vested shares are yours; no expiration	Options typically expire 90 days post-termination
Tax at vest	Ordinary income on FMV	None (for ISOs); ordinary income on spread (NSOs)
Action required at layoff	Check shares are in brokerage account	Must decide whether to exercise before deadline

If you have stock options and are laid off: you typically have 90 days to exercise. This is a hard deadline — missing it means the options expire worthless.

Unvested RSU Value Calculator

Annual Grant	Years Until Fully Vested	% Unvested at Layoff	Value Forfeited
$50,000	4-year, 1-year cliff, Month 6	100%	$50,000
$100,000	4-year, 1-year cliff, Month 14	75%	$75,000
$200,000	4-year, 1-year cliff, Month 26	~38%	~$76,000
$300,000	4-year, 1-year cliff, Month 36	25%	$75,000

Knowing your unvested RSU value is essential before entering any severance negotiation.

Action Steps After a Layoff with RSUs

Priority	Action
Immediate	Log into your equity platform (E*Trade, Fidelity, Shareworks, Carta) and verify what is in your account
Day 1-3	Review your equity award agreement to determine unvested value and any acceleration provisions
Day 1-7	Calculate the unvested RSU value — include this in your severance negotiation
Before signing	Ask HR explicitly: “Is there any provision for RSU acceleration in the severance package?”
After layoff	Check if a trading window restriction applies before selling vested shares
Tax planning	If you receive accelerated vesting, consult a CPA — significant W-2 income will hit in the layoff year

Bottom Line

Vested RSUs are already your shares — they don’t disappear. Unvested RSUs are forfeited in most cases, but they are negotiable. Knowing the value of your unvested equity before signing your severance agreement is critical. A senior employee with $150,000 in unvested shares who signs without negotiating may be leaving their largest single asset on the table.