A layoff notice from Amazon starts five time-sensitive clocks that most employees do not know about. Amazon announced cuts affecting hundreds of employees in its retail division on October 8, 2026. If you got a "priority meeting" email, your clocks are already running. This article walks through every deadline, in the order you need to hit them.

The most urgent actions:
  • File for unemployment in Washington today at esd.wa.gov, benefits are not retroactive.
  • Do not sign your severance agreement yet, you have at least 21 days to review it.
  • Elect COBRA or enroll in a Marketplace plan within 60 days of your termination date.
  • If you hold Amazon ISOs, you have 90 days post-termination to exercise them as ISOs.
  • Decide what to do with your 401(k) before the 60-day indirect rollover window closes.

What happened

Amazon announced layoffs in its retail division on October 8, 2026, affecting hundreds of employees across several teams. Affected workers received "priority meeting" calendar invitations as the notification method. Amazon has not publicly disclosed severance terms.

What should you do about unemployment first?

Unemployment insurance is a state-run program that pays you a percentage of your prior wages while you look for work. In Washington state, where Amazon is headquartered, the program is administered by the Employment Security Department.

File the same day if you can. Washington does not backdate claims to your termination date if you wait. Every week you delay is a week of benefits you do not get back. The filing portal is esd.wa.gov.

Washington's maximum weekly unemployment benefit is $1,019 as of 2026.1 Your actual benefit depends on your earnings history, but that is the ceiling. You will need to verify your identity through the state's ID verification process before your first payment releases. Have your ID ready when you file.

One common mistake: people wait until they know whether they are taking the severance before filing for UI. Don't wait. You can always adjust later, but you cannot recover missed weeks.

Already have your checklist started? Use our post-layoff checklist to track each of these deadlines in one place.

What should you do about your severance agreement?

A severance agreement is a contract. Amazon pays you money; you give up the right to sue them for most claims. That trade-off may be worth it, but you need to understand what you are signing before you sign it.

If you are 40 years old or older, federal law protects you here. The Older Workers Benefit Protection Act (OWBPA) requires that Amazon give you at least 21 days to review a severance agreement that waives age discrimination claims. If two or more employees were let go in this round (which appears to be the case), that window extends to 45 days.2

After you sign, you still have 7 days to change your mind and revoke the agreement. The agreement does not become final until that revocation window closes.2

Use this time. Look for these things in your agreement:

If anything feels off, an employment attorney can review it. Many offer free consultations or flat-fee reviews for severance agreements specifically.

What should you do about health insurance?

COBRA is the federal program that lets you continue your Amazon health coverage after you leave. The coverage is identical to what you had. The catch is cost: you pay the full premium (both your share and Amazon's share) plus a 2% administrative fee.

The average COBRA premium for individual coverage in 2026 is approximately $703 per month.3 For family coverage, that number is significantly higher. Check your specific plan documents for the exact Amazon premium.

You have 60 days from your qualifying event (termination) or from the date you receive the COBRA notice, whichever is later, to elect coverage.4 The important thing to know: COBRA is retroactive. That means if you get sick on day 45 and then elect on day 58, your coverage is treated as continuous from day one. You will owe back premiums, but you are covered.

The alternative is the ACA Marketplace. Losing employer coverage triggers a 60-day Special Enrollment Period.5 Depending on your projected income for the year, you may qualify for subsidies that make Marketplace plans meaningfully cheaper than COBRA. Compare both before you decide. Healthcare.gov is the Washington state exchange entry point.

What happens to your Amazon equity?

Amazon grants both RSUs (Restricted Stock Units) and, for some roles, stock options. They work very differently on termination.

RSUs: Any RSUs that have already vested and settled are yours. They sit in your brokerage account and you can sell or hold them. Unvested RSUs are forfeited on your termination date. Check your equity portal (typically Fidelity or E*TRADE for Amazon employees) to see exactly what vested and what did not.

Incentive Stock Options (ISOs): If you hold ISOs, the clock starts immediately. You have 90 days after termination to exercise them and retain favorable ISO tax treatment under IRC Section 422.6 After 90 days, any unexercised ISOs convert to Non-Qualified Stock Options (NQSOs), which are taxed less favorably as ordinary income at exercise.

There is an AMT wrinkle with ISOs worth knowing. When you exercise an ISO, the spread between the exercise price and the fair market value is an AMT preference item. If Amazon's stock has appreciated significantly and you exercise a large block, you could owe Alternative Minimum Tax in the year of exercise even if you do not sell the shares. Run the numbers before exercising, especially if the spread is large.

Log in to your equity account this week and pull your grant statements. You need the grant date, the vesting schedule, the exercise price, and the expiration date for every outstanding grant.

What about the taxes on your severance?

Severance is wages. The IRS treats it as supplemental income, which means Amazon withholds federal income tax at the flat supplemental rate of 22% on the first $1 million.7

Here is the problem with that: 22% may be lower than your actual marginal rate. If your total income for 2026 (including severance, weeks of regular salary before the layoff, and any other income) puts you in the 24% or higher bracket, you will owe the difference at tax time.

Q2 and Q3 estimated tax payments were due June 15, 2026, and September 15, 2026, respectively.8 If you are reading this after October 8, 2026, the Q4 estimated payment (due January 15, 2027) is the next one to plan for. If your withholding is short, a Q4 estimated payment reduces or eliminates any underpayment penalty.

Set aside a portion of your severance now. Do not wait until April to figure out whether you owe more.

What should you do with your Amazon 401(k)?

When you leave Amazon, you have four options for your 401(k): leave it in Amazon's plan (if the balance is above the plan minimum), roll it to your new employer's plan when you land a job, roll it to an IRA, or cash it out.

Cashing out is almost always the wrong move. You owe income tax on the full distribution plus a 10% early withdrawal penalty if you are under 59 and a half. That combination can cost you 30 to 40 cents on every dollar.

The cleanest option for most people is a direct rollover to an IRA. You open an IRA at any major brokerage, give them your Amazon 401(k) account information, and they handle the transfer. No taxes, no penalties, no deadline pressure because the money never touches your hands.

If you take an indirect rollover (Amazon sends you a check), you have 60 days to deposit the full amount into an IRA or another qualified plan.9 Amazon is required to withhold 20% for taxes when they cut that check. You would need to come up with the withheld 20% out of pocket to roll over the full amount, then reclaim that withholding on your tax return. The direct rollover avoids all of this.

Deadlines and rules described here reflect federal law and general state guidelines as of the article date.

The Layoff Guide

The deadlines above apply whether or not you are tracking them. The Layoff Guide from Layoff HQ is a 33-page field guide that covers all twelve post-layoff deadline events in the order they arrive: unemployment, the severance review and revocation windows, COBRA and the Marketplace, your FSA, your equity window, your 401(k), and your taxes. Each event comes with timed checkpoints, the decision math, and the one mistake that costs people the most, plus a fill-in worksheet that turns your last day worked into your complete personal deadline calendar. One-time purchase. No subscription. Instant download, with a 14-day full refund if it is not useful.

Get the Layoff Guide, $39 or build your free Decision Calendar.

Written by the Layoff HQ research team. Sources verified against DOL, EEOC, IRS, and state workforce agency primary documentation.

  1. Washington State Employment Security Department. "Calculate your benefit." esd.wa.gov.
  2. U.S. Equal Employment Opportunity Commission. Age Discrimination in Employment Act. eeoc.gov. OWBPA, 29 U.S.C. ยง 626(f).
  3. KFF. "Health Policy 101: Employer-Sponsored Health Insurance." kff.org.
  4. U.S. Department of Labor. "COBRA Continuation Coverage." dol.gov.
  5. HealthCare.gov. "Special Enrollment Period." healthcare.gov.
  6. Internal Revenue Service. IRC Section 422. IRS Publication 525. irs.gov.
  7. Internal Revenue Service. Publication 15 (Circular E). irs.gov.
  8. Internal Revenue Service. "When to Pay Estimated Tax." irs.gov.
  9. Internal Revenue Service. "Rollover Chart." irs.gov.