Workers affected by layoffs are suddenly faced with many drastic changes all at once: the loss of livelihood, routine, and benefits (if the job offered them). They’re left to navigate separation agreements, severance packages, and unemployment benefits with little guidance. All this on top of the already arduous job search process.
Still, laid-off employees often have more power beyond what the company initially spells out upon eliminating your position. While Vox can’t offer financial or legal advice, there are general guidelines to help workers in transition. From negotiating severance packages to dealing with unemployment, here are some tips to help guide you through the days and weeks after a layoff.
Getting laid off can be an incredibly stressful and uncertain time. Even if you see signs that layoffs may be coming, it can still feel like a shock when you receive the news.
While there’s no way to fully prevent the difficulties that come with losing your job, you can take steps to reduce the impact and set yourself up for success. With the right preparation and mindset, you can make the transition much smoother and emerge in a strong position for your next opportunity.
In this comprehensive guide, we’ll explain how to optimize the situation and move forward with confidence. Follow these tips before, during, and after a layoff to take control of your career.
Detect Early Warning Signs of Layoffs
While layoffs may seem sudden there are often red flags ahead of time. Paying attention to clues in your workplace and industry can help you anticipate changes and get a head start on preparations.
Some common early warning signs of layoffs include
- Leadership changes like a new CEO or CFO
- Hiring freezes and budget cuts
- Reduced spending on training, events, bonuses, and other non-essential costs
- Delayed or cancelled projects, contracts, and initiatives
- Low employee morale and increased gossip
- Mandatory all-staff meetings focused on “economic conditions”
Think back on the recent dynamics and financial health of your company. Have you noticed any of these patterns? That doesn’t definitively mean layoffs are imminent, but it’s wise to heighten your awareness.
Discuss your concerns discreetly with trusted coworkers, especially those in senior roles who may have insider knowledge. While rumors shouldn’t necessarily be taken as fact, they often stem from truth.
Look beyond your individual organization as well. Research what’s happening industry-wide and whether peers at other companies have experienced hiring freezes, layoffs, or losses in business. This context can reveal systemic issues.
While you shouldn’t panic or assume the worst, picking up on potential problems early allows you to control the narrative. You can quietly take proactive steps instead of waiting to be caught off guard.
Strengthen Your Finances Beforehand
One of the biggest stresses of a layoff is the loss of income. When you suspect layoffs may be looming, immediately get your finances in order. That way, you’re prepared for loss of your paycheck.
First, reduce any discretionary spending to only true necessities. Cut back on things like subscriptions, meals out, travel, and other non-essential costs. Avoid any major purchases for cars, homes, or other big commitments.
Next, build up your emergency fund if you haven’t already. Aim for at least 6-12 months of living expenses in cash savings as a buffer. That money can tide you over until you secure your next job. Make consistent contributions each month leading up to layoffs.
Pay off any high-interest debts that have significant monthly payments. Credit cards, payday loans, and other debts strain your budget. Eliminating those can free up cash flow if you lose income. Stop using credit cards altogether until things stabilize.
Check on the status of your severance package if layoffs seem probable. Reach out to HR discretely to understand what benefits you’re entitled to. This allows you to better calculate the size of your emergency fund.
If you have a spouse or partner, talk to them about tightening your collective budget and relying more on their income. Have them save extra from their paychecks as well.
With finances in order beforehand, you can feel more secure through an unexpected job loss. Monitor spending diligently and use your savings wisely. The more frugal you become, the longer your emergency fund will last.
Know Your Rights to Benefits
Layoffs spur many questions around benefits like health insurance, severance pay, accrued vacation days, 401ks, and pensions. Avoid surprises by understanding company policies and legal requirements ahead of time.
Schedule a meeting with your HR department to review all benefits you currently receive. Ask how long each would continue if you were laid off. Get clarification around eligibility, premiums, portability, and any other considerations.
For example, find out how many unused vacation and sick days you’ve accrued that could be paid out. See if your health insurance extends through the remainder of the calendar month or if it ends immediately.
Ask HR to explain severance packages, 401k rollovers, and pension freezes or distributions if applicable. In some cases, you may get a continuation of certain benefits or special accommodations like job placement assistance.
Jot down all the key details so you can refer back to them later if needed. Keep records of any correspondence as well.
If HR seems unwilling to answer your questions transparently, you can look up your legal rights. The Department of Labor, Equal Opportunity Employment Commission, and state labor offices offer resources on benefits entitled by law. For example, you may qualify for continued health insurance through COBRA.
The more informed you are, the better you can weigh options and reduce stress around things like gaps in health coverage. Make choices that protect your finances and needs first and foremost.
Secure Important Documents and Items
As layoffs approach, discretely gather any personal belongings, documents, or resources you may need later. It’s possible you’ll have limited access to your workplace after being let go.
Make copies of and safeguard any records related to your employment, pay, performance reviews, benefits, and other HR paperwork. Also keep copies of client lists, calendars, and project files showing your contributions. Those can aid with applying for unemployment benefits.
Save contact information for colleagues you want to keep in touch with, especially managers willing to serve as references. Download any personal emails, documents, or projects stored on your work computer.
Back up important computer files through external drives, cloud storage, or email attachments. You likely won’t have access to internal systems after you’re let go.
Take home any personal possessions from your desk, office, locker, etc. Assume anything left behind may be packed up by others. Discreetly transport items in small batches over time rather than all at once to avoid suspicion.
Securing your professional and personal information prepares you to smoothly transition out. Once released, request written confirmation from HR of your severance terms, benefits policies, and any other agreed upon conditions.
Network Both Internally and Externally
Networking is critical before, during and after a layoff to uncover job leads and tap into connections. Make it a priority if you expect to be laid off.
Inside your company, strengthen ties with colleagues in divisions that are more financially stable and less likely to have layoffs. Reach out for coffee chats and build rapport.
Let them know discreetly you’re concerned about layoffs and are looking to expand your network outside your immediate team. They may be willing to connect you with contacts at other firms.
Attend industry events, conferences, workshops, and trade shows in your field. Introduce yourself to attendees and exchange contact info. Sign up on relevant professional associations and forums to find peers.
Outside of work, tell family and friends about your situation in case they know of openings suitable for you. Reach out to former managers, colleagues, college alumni, and other personal contacts who could help.
Expanding your network boosts visibility among hiring managers and recruiters. It increases the chances they’ll think of you for jobs. Maintain contact with new connections through periodic emails, messages, and coffee meetings.
Update Your Resume and LinkedIn Profile
With a layoff imminent, take time to update your resume and LinkedIn to quickly ramp up your job search. Reflect on your recent responsibilities, accomplishments, skills gained and projects completed. Quantify your achievements with data and metrics.
Customize your resume using targeted keywords for the types of roles you want to apply for next. Highlight transferable skills from your current position. Remove outdated information.
Similarly, update your LinkedIn headline, summary, experience, and accomplishments. Add new connections made through networking. Join relevant professional groups.
Update your skills section on LinkedIn using their provided list. Take assessments to endorse skills from coworkers and get recommendations from managers, if possible.
Having an updated resume and robust LinkedIn presence allows you to promptly begin applying and connecting with prospective employers as soon as you’re laid off.
Line Up References in Advance
Layoffs often mean you won’t have much advance notice before exiting. Beforehand, discreetly line up 3-5 people willing to serve as strong professional references for you.
Ideally, choose current or former supervisors, clients or senior colleagues who can speak in detail about your responsibilities, work ethic, skills and achievements. Make sure they’re comfortable being contacted by hiring managers.
Provide them with an updated resume so they’re familiar with your background and qualifications. Discuss the types of roles you’re targeting next.
Let them know you may be laid off soon and would appreciate being able to list them as a reference. Make sure you have their current job title, company, phone number and email address.
Great references are invaluable when trying to secure a new position quickly after a layoff. The ideal ones can highlight your strengths while positioning you as an excellent candidate.
Launch Your Job Search Soon After Release
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What to do the day you are laid off
Receiving news that your position has been eliminated can be shocking and upsetting. You may have gotten notice in a group call, in a one-on-one meeting, or over email. Before taking action, pause and review all of the information you have about the separation as outlined in those meetings, says Lauren McGoodwin, founder and CEO of the online job resource website Career Contessa. Companies aren’t required to offer severance, but many do, and severance details may be a part of these documents. Each individual employer can decide whether to offer severance to part-time employees. “Take a moment to decompress,” she says. “Don’t sign anything right away. Don’t react to it.”
Now would be a good time to speak to your union representatives, if you’re a member of a union, before signing any agreements. “Often, they will have specific supports in place that you can access,” Green says. Read over your collective bargaining agreement’s layoff clause, which should outline the process for deciding which positions are eliminated and whether you could potentially be rehired.
Davis says sometimes employment lawyers will offer free consults to talk through any potential legal issues or to look over your severance agreement, but be sure to clarify any fees before taking a meeting. “There’s a lot of people that have legal claims and they just don’t know it,” Davis says, “especially among those who are disenfranchised and don’t have access to the systems in power.”
If the company has sent over a separation agreement document — which lays out the conditions of the layoff — pay attention to the deadline you have to accept. Very rarely will your employer require you to sign on the spot or object to you showing the document to a lawyer, Green says, and if they do, those are major red flags. It’s also illegal to force laid-off employees over the age of 40 to sign a separation agreement too soon. Under the Age Discrimination in Employment Act, laid-off workers 40 years old and up have at least 21 days to review a severance agreement; if they are a part of a group layoff, they have 45 days to review. Employees under 40 are often given the same duration review period. Employees over 40 who have been let go are also entitled to see the job titles and ages of the people in their department also being laid off and those whose positions have not been eliminated.
“Take a moment to decompress. Don’t sign anything right away. Don’t react to it.”
Regardless of your age, Davis recommends checking in with your colleagues to determine the demographics of the people laid off. If a majority of the people whose positions were eliminated are older than 40, are women, are disabled, or are people of color, you may have a discrimination claim.
As soon as you get the news of the layoff, start the application process for unemployment insurance. The specifics around filing for unemployment differ from state to state, but if you lost your job through no fault of your own, you are eligible. Part-time workers can claim unemployment so long as you worked the minimum amount of hours or made over a certain threshold as determined by the state you work in. In some states, if you receive severance pay, you can’t collect unemployment or may be eligible for a lower amount. In other states, such as California, you can collect unemployment even if you earn severance pay. Check with your state’s unemployment office for specific guidelines around how much you’re eligible for and what you need to apply (usually, Social Security number, ID number, mailing address, phone number, company name, and address). It’s a notoriously confusing process, and you’ll have to file continually until you find a new job.
You may want to email any clients or professional contacts outside the organization to let them know you’re leaving the company. Read over any nondisclosure or confidentiality agreements and ask your soon-to-be-former manager if it’s okay if you alert these contacts, McGoodwin says. If your boss declines, McGoodwin advises posting about the layoff on LinkedIn or a social platform where those contacts are likely to see.
What to do the week after you’ve been laid off
After you’ve had a chance to thoroughly read any materials sent by the company, determine exactly what they’re offering versus what you need, McGoodwin says. Is your severance paid out as a lump sum or a continuation of your salary over a certain period? Will your health insurance benefits be continued, or will you have to pay the entire premium through COBRA? Is the company willing to pay for other assistance, like a career coach? “Let’s say they’re giving you a single lump sum,” McGoodwin says. “How much of a runway does that give you before you need to job-search again? Because maybe you need to go back and try to negotiate for a larger lump sum. Or maybe you’re okay with that lump sum, but … because your whole family uses your health insurance, you really want a longer continuation of the health insurance benefits.”
Your needs can help guide your negotiations with the company regarding the terms of your separation. Think about what you’d be willing to do without in order to get what you want. If the company is offering three weeks’ pay for every year you worked at the business, but you’d rather have an extension of health insurance coverage, you can suggest dropping to two weeks’ pay for every year and continuing health insurance coverage. If you haven’t been offered severance pay at all, always ask for it, Davis says. The company may outright refuse any negotiation, McGoodwin says, but it’s worth asking.
When discussing the terms of your separation, bring up any concerns you have, Green says. Say you reported discrimination within the last year and now you’re being laid off. You have reasonable grounds to suspect it might be retaliation. Or if you’re the only person from a different demographic on your team and you were the only one laid off, “it’s not unreasonable to wonder about that stuff,” Green says. You may be better positioned to negotiate for more favorable terms on your severance.
One fairly standard aspect of severance packages is what’s called a general release of claims. “That says in exchange for accepting the severance, you agree that you’re not going to sue the company moving forward for a whole array of things: harassment, discrimination, disability law violations,” Green says. “That is normal.” So don’t be concerned if you see this type of language.
If you suspect you’ve been laid off based on age, race, or gender, or if you recently reported harassment or other wrongdoing, you may want to talk with an attorney. Should you not sign the exit agreement, you won’t get any of the pay or other benefits outlined in the document.
Regardless of whether your company is offering a severance package, you’ll want to have a set plan for health insurance. If your company did not offer you insurance or you weren’t enrolled on their plan, your health insurance coverage will not change. Laid-off workers can continue coverage on their company plans through COBRA but may have to pay the entire premium. You can also enroll in a plan through the Health Insurance Marketplace.
With livelihood logistics out of the way, update your resume, LinkedIn, and portfolio so you can let your network know you’re searching for a new job. McGoodwin recommends sending an email to professional contacts or mentors that includes a resume and your LinkedIn profile as well as a message explaining the type of job you’re looking for, your skills, and if they have any leads or connections. “That way they can say, ‘Do I know someone within that world that I can help connect them with?’” McGoodwin says.
Reach out to your former manager and ask them what the company will tell future reference checkers about your performance and the reason you left, Green says. “A layoff itself is not something that should be held against you,” she says, “but if you are selected for your layoff in part because of your performance, you do want to know that so that you’re not blindsided if it comes up in a reference later.”
How To Prepare For A Layoff
How do I prepare for a layoff?
Here are the steps you can take to prepare for a layoff: 1. Focus on what you know for sure In some organizations, you may hear rumors about layoffs before you officially find out who the layoffs affect. In other organizations, you might be told directly of your layoff but hear gossip about why the layoff happened.
What should you know before laying off employees?
Thus, before laying off any employees, ensure that you have all the necessary information to guide your decision. For example, ensure you know the employee’s job title, duties, relevant skills, years of experience, and other factors that might influence the layoff decision. 2. Focus on a fair layoff Terminating several workers can be difficult.
What should I do if my company decides to layoff employees?
Tell your family as soon as possible so that everyone can prepare for leaner times. Your family is your support and should be kept in the loop no matter what happens. Demonstrate your value. If your company has decided to layoff employees, it means they are reorganizing their workforce to avoid financial collapse.
What should I do if I get Laid off?
Don’t take the layoff personally. Take some time to plan your next move once you’ve received your layoff letter. Do not lash out at your employer or colleagues. What is the first thing I should do when I get laid off?
