That has nothing to do with capitalism and more to do with our tax laws, but more importantly if you have a mortgage, kids, aging parents, etc you should probably get a job with a stable salary instead of gambling with startup equity. At the end of the day it comes down to responsible choices.
Capitalism is fine. WeWork is Trump scale criminal financial fraud. Adam Neumann should have gotten exactly zero dollars for leaving the company. The company is so broke it can't afford severance for regular workers, and this crook gets 1.7 billion dollars to go away?
That's unjustifiable hyperbole. WeWork is (was) certainly a very strange company, with a very strange founder, and a very strange mission, but I don't see any actual fraud involved (if there's further investigation, fraud may certainly turn up, but I don't think that's a reasonable accusation given what we know now). Neumann built a real estate company, convinced some surprisingly-gullible investors that it was a world-changing tech company, and for the most part did what he advertised: built up a ton of owned or leased office space and then re-leased it to small businesses.
> The company is so broke it can't afford severance for regular workers
That's unfortunately common with growth companies who don't give themselves enough runway in the assumption that funding events will be frequent and reliable, and then find that assumption to be false. That's the failure story of many, many startups. WeWork has just gotten a ton of press owing to its size, eccentric founder, and investors.
Regardless, laid-off workers are not owed severance; it's a nice thing to do, but as a worker, expecting that safety net as guaranteed in a place with at-will employment is foolish.