Wall Street is cutting deep this year, and the cuts aren’t stopping at the analyst level. Overall, Wall Street is transitioning from pandemic-era mass layoffs to more targeted, structural job cuts focused heavily on automation and reducing middle- and back-office operational roles. Additionally, institutions are shifting to continuous, rolling performance-based cuts while replacing expensive senior executives with lower-cost junior staff to optimize efficiency.
For example, HSBC has announced plans to eliminate 20,000 positions, roughly 10% of its global workforce, and Citigroup is in the middle of a multiyear reduction that will remove 20,000 jobs worldwide by year end, including a fresh round of cuts at its Tribeca headquarters this spring. Bank of New York Mellon has quietly shed thousands of roles over the past two years even as employees and industry observers question how executive compensation has held up by comparison.
If you’re a vice president, managing director, or C-suite executive at a New York bank and you’ve just been handed a separation agreement, do not be mistaken, the document in front of you was drafted entirely to protect your employer, not you. Understanding what it actually says, and what it’s asking you to give up, is the difference between a smooth transition and leaving real money and legal rights on the table.
Severance Isn’t Guaranteed, and That’s the First Thing to Understand
New York law does not require private employers to offer severance to anyone, executives included, absent contractual obligations of course. Whatever is on the table is a negotiated benefit, not a legal entitlement, which means nearly every term is open for discussion (and argument) before you sign. Banks often count on departing executives treating the first offer as final. Many perceive “lawyering up” as distasteful, not good form; big banks and companies rely on corporate Stockholm Syndrome to chill the assertion of your rights. Yet, if you read your proposed separation agreement carefully, you will inevitably see the provision indicating you have had the “opportunity to have an attorney review the documentation.” You will be required to sign off on that, so you owe it to yourself to consult with counsel. For many of us employment attorneys, we will be happy to provide you with a free consultation.
Five Provisions That Deserve Extra Scrutiny
1. Non-compete and non-solicit clauses. Restrictive covenants written for a mid- and upper-level employee look very different when applied to someone with client relationships and institutional knowledge. An overly broad non-compete can effectively sideline you from the industry for a year or more. These terms are negotiable, and in some cases, unenforceable as written.
2. Claw-back and forfeiture-for-competition provisions. Deferred bonuses, un-vested equity, and long-term incentive awards are increasingly tied to conditions that trigger after you leave. Read the forfeiture language closely. It may allow the bank to claw back compensation you’ve already earned if you join a competitor or if conduct issues surface later.
3. Offset and mitigation clauses. If your severance is structured as salary continuation, some agreements let the bank stop payments the moment you accept a new role. Others don’t. This single clause can be worth tens of thousands of dollars depending on how quickly you land your next position. This provision can often be negotiated as well.
4. The release of claims. Signing a general release typically waives your right to bring discrimination, retaliation, or unpaid bonus claims against your employer. Before you sign away that right, it’s worth having someone independently assess whether age discrimination, whistleblower retaliation, or wage claims exist. Executives over 40 are entitled to specific review and revocation periods under federal law before a release becomes binding. And chances are, if you were to assert a claim, it would be in the private arbitration context, with the bank paying for the arbitration fees, minus a few hundred dollars for filing.
5. Indemnification and legal fees. If your role exposed you to potential regulatory inquiry or litigation tied to decisions made while employed, make sure the agreement protects you going forward and, where possible, covers your legal costs.
Why the Current Environment Changes the Calculus
Banks executing large-scale reductions are moving fast, and severance terms offered during a mass restructuring are often templated rather than individually negotiated. That works in the bank’s favor, not yours. When cuts are this broad, employers are also more likely to face WARN Act notice questions and discrimination claims tied to which roles and which employees were selected for elimination. If your termination happened alongside a broader reduction in force, it’s worth asking whether the selection criteria were applied consistently.
Before You Sign
A severance agreement is a contract, and like any contract, it’s written by one side to favor that side. Whether you’re negotiating an initial exit package or reviewing terms after a bank-wide restructuring, an experienced employment attorney can identify what’s missing, what’s negotiable, and what claims you may be giving up.
Giordano Law represents New York executives and professionals navigating layoffs, forced exits, and severance negotiations. If you’ve received a separation agreement from a bank or financial institution, contact Giordano Law at gio-law.com before you sign. We will provide you with a free consultation to determine what makes sense for you!
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This article is for informational purposes only and does not constitute legal advice. Consult an attorney regarding your specific circumstances.