In the context of employee termination, what is severance intended to provide?

Severance is a form of compensation that is intended to provide financial support to employees who are terminated from their position, essentially compensating them for the process of leaving the company. It serves several purposes, such as helping the affected employees navigate the transition by providing them with a financial cushion while they seek new employment. This financial support can also ease the potential financial stress that comes with an unexpected job loss.

The concept of severance aligns closely with the notion of providing a transitional safety net for employees, helping them adjust during a potentially challenging time without immediately facing economic hardship. Thus, the purpose of severance is to acknowledge the employee's service and to assist them as they move forward, rather than being a reward for long tenure, a salary for future employment, or a retirement fund.