HubSpot Cuts About 660 Jobs in an AI Restructuring: What Its Severance Offer Shows About Protecting Yourself in a Layoff

Another well-known tech company is shrinking its workforce, and the details offer a useful checklist for any worker.

HubSpot, a Cambridge, Massachusetts-based company that makes marketing and sales software, said on Tuesday, Oct. 6, that it is cutting about 660 jobs. That's roughly 7% of its global workforce, according to Boston.com and Quartz.

CEO Yamini Rangan announced the cuts in a letter to employees. She said the company is shifting "from building software to help customers grow to delivering outcomes for them with AI," and that this requires big changes to how teams are organized.

Why HubSpot says it is cutting jobs

Although the restructuring is tied to the company's AI strategy, Rangan said the cuts themselves are not about replacing people with AI. "This is not driven by AI-related efficiencies," she wrote, adding, "This is not simply a cost-cutting exercise," according to Boston.com.

The company plans to:

• Reorganize product teams around customer results instead of individual product lines.
• Reduce layers of management.
• Create teams with clearer ownership so decisions can be made faster.

HubSpot expects the restructuring to cost between $65 million and $75 million, according to Quartz. The company was founded in 2006 and employs more than 9,000 people, Boston.com reported.

What the severance package includes

Severance is pay and benefits a company gives workers when it lets them go. It isn't required by federal law in most cases, so packages vary a lot.

According to Boston.com, HubSpot's package includes:

• 20 weeks of base pay, plus one more week for each year of service, up to 30 weeks total.
• Continued health benefits.
• Six months of career transition services, such as job-search help.
• Permission to keep company laptops and work-from-home equipment.

Part of a bigger trend

HubSpot joins a growing list of tech employers reshaping their workforces as they invest in artificial intelligence. For workers, that can mean new kinds of jobs opening up even as others disappear.

What this means for your wallet

Whether or not you work in tech, a layoff can happen with little warning. A few steps may soften the blow:

• Build a cushion: An emergency fund covering several months of essential expenses can buy time to find the right next job.
• Know your benefits now: Find out what your employer's policy says about severance, unused vacation pay and health coverage. If you leave a job with employer health insurance, you may be able to keep it temporarily through COBRA, though you may have to pay the full premium plus up to a 2% fee, according to the U.S. Department of Labor.
• Read before you sign: Severance agreements often ask you to give up the right to sue. Take time to read the terms, and consider asking an employment lawyer to review them.
• File for unemployment promptly: Rules differ by state, and severance pay can affect when benefits start in some states. Check with your state's unemployment office.
• Keep skills current: Learning new tools in your field, including AI tools, may make you more valuable to employers.
• Update your budget fast: If you're laid off, trim nonessential spending right away and stretch your savings while you search.

What a package like HubSpot's is worth in real dollars

Severance formulas are easier to judge with numbers. Under HubSpot's formula, an employee with five years at the company would get 20 weeks plus 5 more, or 25 weeks of base pay. On an $80,000 salary, that's about $1,538 a week, or roughly $38,500 before taxes. Someone with 10 or more years would hit the 30-week cap, about $46,150 on the same salary.

Severance is taxed as ordinary wages, so the amount that lands in your bank account will be smaller. And because it's usually paid as a lump sum or over a set schedule, it's worth planning how many months of essential bills it actually covers before you count on it.

Your first week after a layoff: a quick checklist

1. Get the details in writing: your last day, final paycheck date, severance amount and any deadline to sign the agreement.
2. Ask what happens to unused vacation, bonuses, stock awards and your 401(k) match.
3. Compare health insurance options: COBRA, a spouse's plan or a marketplace plan. Losing job-based coverage usually opens a special enrollment window.
4. File for unemployment with your state, and ask how severance affects your start date.
5. Build a bare-bones budget so you know how long your savings and severance will last.

For a deeper plan, read our guides on how to prepare for a layoff, unemployment benefits explained and how to build an emergency fund, step by step.