ServiceNow spends $211 million on acquired talent while layoffs continue
The company's latest filing reveals deferred compensation for key employees from its 2026 acquisitions, alongside $167 million in severance costs. The figures highlight how ServiceNow is reshaping its workforce as it integrates billions of dollars in acquisitions.
ServiceNow has been cutting jobs in the United States, Britain and India while recording hundreds of millions of dollars in deferred compensation for key employees who joined through its recent acquisitions, according to its latest quarterly filing.
The company's report for the quarter ended September 30 discloses that aggregate deferred compensation for certain key employees associated with its 2026 acquisitions reached $211 million during the first nine months of the year. The amount is recorded as a prepaid asset and amortized into research-and-development expenses over the employees' applicable service periods.
The disclosure does not specify how many employees are covered, how long they must remain with the company, or how the compensation is divided among individual acquisitions. It also does not identify how much is associated with the Israeli cybersecurity company Armis, which ServiceNow acquired in April.
The $211 million is a cumulative figure for the first nine months of the year, rather than a new third-quarter payment. ServiceNow had already disclosed $162 million in deferred compensation in its previous quarterly filing, covering the first half of 2026. The latest filing says the amount recognized during the third quarter itself was immaterial.
The deferred compensation stands alongside a substantial severance bill as ServiceNow reshapes its workforce. The company recorded $167 million in employee severance and related costs during the first nine months of 2026, including $87 million in the third quarter, compared with $53 million and $24 million, respectively, in the same periods last year. It paid $153 million of the severance costs in cash and ended September with a remaining liability of $34 million.
ServiceNow has described the restructuring as part of a strategy to optimize its workforce through AI-driven efficiencies while investing in talent in key strategic areas. It said the program is expected to be substantially completed in 2026.
ServiceNow completed its acquisition of Armis on April 20 for preliminary consideration of approximately $7.6 billion in cash, and purchased identity-security company Veza on March 2 for approximately $1.2 billion. Five additional acquisitions completed during the first nine months of 2026 involved total consideration of $612 million. ServiceNow acquired four Israeli startups besides Armis in 2026, including Sweep, Traceloop, ai.work, and Pyramid Analytics.
Together, the seven deals represented approximately $9.5 billion in acquisition consideration. Armis alone accounted for about 81% of that amount. However, the filing does not disclose how much of the $211 million in deferred compensation is tied to Armis, Veza or the other acquired businesses.
ServiceNow has also made substantial compensation commitments to its senior leadership. On October 26, its board approved leadership awards with a combined target value of approximately $127 million, including $50 million for CEO Bill McDermott, with vesting scheduled between 2027 and 2029.
