Amazon job cuts 2025: Hit by layoffs? Key things to know about Severance Pay, PF, gratuity, and taxes

Amazon is set to lay off up to 30,000 corporate employees, marking its most significant job cuts since 2022, according to a Reuters report. This move represents nearly 10% of its 3,50,000 corporate workforce.

The layoffs will impact various departments, including human resources, operations, devices and services, and Amazon Web Services (AWS).

The company, with a global workforce exceeding 1.54 million employees, including warehouse staff, has already cut more than 27,000 jobs since 2022 through several smaller layoff rounds.

Job cuts affect more than just careers; they also bring important financial and tax implications.

1. Emergency Fund

2. Provident Fund

Next is the Provident Fund (PF), the retirement savings you and your employer contribute to. If you leave your job, you can withdraw your PF.

Moreover, under special situations (such as a natural disaster, pandemic, lockout, unemployment, etc), members will also be allowed to make 100% withdrawals from their EPF accounts.

In normal situations, members will be allowed to withdraw only up to 75% of their EPF balance.

"75% of the eligible amount now withdrawable at any time without any documentation; full withdrawal also allowed under special situations," EPFO said in another release dated October 15, 2025.

3. Gratuity

Gratuity, which is extra money awarded to employees with five or more years of service, can be received tax-free up to ₹20 lakh under the Income Tax Act.

Under Section 10(10) of the Income Tax Act, the maximum tax-exempt limit for gratuity is ₹20 lakh for private-sector employees. For central government and state employees, it's fully exempt.

4. Severance Pay

“Workmen employees are entitled to 15 days’ pay per year of service under the Industrial Disputes Act, 1947, while managerial staff severance depends on their contracts. Many companies offer higher payouts, often 30 days per year—or set caps based on years to retirement,” said Pooja Ramchandani, Partner, Shardul Amarchand Mangaldas & Co.

5. VRS compensation

In case of voluntary retirement schemes (VRS), up to ₹5 lakh of the package can be tax-exempt.

Section 10 (10C) of the Income Tax Act exempts up to ₹ 5 lakh of VRS compensation from income tax. You must file it within the same tax year as your compensation payment.

6. Stock options

Finally, for employees with stock options, being laid off can change how and when you can access them. Sometimes, layoffs mean you get the right to own the shares sooner than planned, or you may have a limited window to buy them.

The tax you owe depends on how you handle the shares: selling them immediately treats the gains as salary income, taxed at your regular income tax rate, while selling later classifies the gains as capital gains, usually taxed at a lower rate.

Being aware of these rules and planning can help employees manage financial risks and reduce stress during a sudden job loss.