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How to handle a layoff

Hey kids! Let’s chat about what being laid off can look like and how to handle it, as well as how to plan for it, just in case.

Adulting is hard.

Sometimes, we get unexpected news that our jobs have been deemed “no longer necessary” by the company we work for. Layoffs are a bummer, even if the job is one we hate. So, let’s dive into the OMG MY BOSS JUST TOLD ME ON A ZOOM MEETING THAT MY JOB IS BEING CUT.

First, try not to panic.

Second, don’t tell your ‘soon to be ex’ boss that they should go to Hell. I ….may have done that once and it then made things awkward when I asked for a recommendation letter. Unless the boss is also the owner, it’s unlikely thr specific person speaking to you personally decided to lay you off. So try not to take out your anger on them. It will be better for you in the future considering you can still use the company for recommendation letters, referrals, networking, and keeping in contact with former coworkers. When you lose your shit on anyone in a company - everyone finds out through the grapevine. The people you spent 40 hours a week with may see you as damaged goods and choose to cut ties even if you were on friendly terms.

I know it’s tough, but keep your cool. Ask questions (I listed some below ⬇️ ), thank them for their time, and leave with a smile. Then go home (or log off the call) and scream, cry, damn people to Hell and make voodoo dolls all you want!

A few things to ask:

  • Is there a severance package

  • How long can I keep my medical coverage

  • How do I sign up for COBRA medical extension coverage

  • Who do I ask for a recommendation letter

  • Where do I get a letter explaining this layoff is not my being fired

  • What date is this effective

  • Will counseling be available

  • Who do I contact if I have more questions

Take the time to grieve this loss.

Yes, it’s a loss, sometimes a traumatic loss, and you need to come to terms with it. It is always a good idea to treat your trauma and heal before starting a new adventure. This is true in your work and personal life.

Next, take a snapshot of your current budget and savings. Oh, you don’t have any savings? Ok. We’ll address that situation a little later.

Write down all your expenses. 💵💵

Now separate those into what you must have to live versus what you’d like to have but don’t need. Housing, medications, food. In todays world - internet services are a need most of the time. Unless you have a local library where you can access the internet to interact with potential new employers and assistance services.

Determine how long you can live without a paycheck on the liquid assets you have. Not your 401K, actual cash assets. So, a savings account or external investments or physical assets that can be sold.

Your 401k should remain in place if at all possible unless you are at your retirement age. If you withdraw funds before retirement age, the penalties are massive and usually not worth it. If your 401k is the only savings you have and you cannot apply for other programs listed below, sometimes this may be your last resort to keep afloat. This is understandable. Don’t become homeless to avoid withdrawing the 401k, that’s not benefitting anyone. But, be prepared for the sticker shock of the penalty fees for withdrawal.

If you don’t have any savings, don’t panic!

This is where the social safety net saves the day most of the time. Read on below for info on government programs like Unemployment, Retirement, and Social Security.

If you have dependents like kiddos, check community resources for assistance with food, clothing, utilities, and rent payments. If you don’t know where to go, try local shelters and churches. They generally have lists of local assistance programs you can apply to. Google is always going to be your best resource for finding what assistance is available to you. Search “income assistance programs near me” and you’ll get the local resources, as well as government programs.

Unemployment benefits

Most of the time in most states, you can and should apply for Unemployment. When an employer lays you off, that is a reason you are allowed to receive benefits. If you quit or are fired - this is generally not an option, but check your local unemployment office website for details. If you are a contractor (you get a 1099 instead of W2’s), this will most likely not be an option but it can’t hurt to research your individual qualification.

Retirement and Social Security

Are you close to retirement age? This would be a minimum age of 60 to potentially retire early. Here’s a great article about Social Security and how it may apply to you.

Do you have a legitimate disability? You may be able to claim SSI due to disability. Sometimes, employees with disabilities have a hard time with new employment and can get help bridge the financial gap by applying for disability.

Ok, so now we’ve got our finances reviewed and have some options. We know where we stand with our budget of needs and wants against cash we have on hand and other government assistance. So let’s say you can live with your needs met on your assets and unemployment benefits for 3 months. This is a really good cushion to give you time to find a new job that you want to have.

Medical and Severance options

Generally, most companies allow a laid off person to continue their electives like medical coverage through the last paycheck received. Some companies give you a severance pay or continue your regular paychecks for a timeframe they determine. Like, some will offer to cut you a regular paycheck for a month while you’re looking for a new job. Some will offer a lump sum severance package based on your time with the company. A severance or extension of salary is specific to each company so there’s really no telling what you could be offered until it happens.

An example:

Company A lays off a tier of managers. They offer each manager 1 week of their current salary for each year of service. If you were at Company A for 5 years, you would get 5 weeks of severance. This could be paid in a lump sum or continue your regular paycheck for 5 weeks. They also offer to keep you on the current medical plan for those 5 weeks. After this 5 weeks each manager will be eligible for COBRA medical benefits. They are not cheap but worthwhile if you have heavy medical needs.

The next thing to do is put yourself back on the job market. Do not - under any circumstances - trash your old company. To anyone. If someone asks, you tell them the reasons your company laid you off and nothing more.

Set yourself as open for work on LinkedIn, Indeed, Dice, and any other job sites you may be listed on. If your career path has dedicated recruiters, contact up to 3 recruiters to assist in your job search. If you use too many recruiters, you will lose track of where you are in the application process for companies and potentially miss completing tasks.

Make sure you keep track of what jobs you are submitted for because if 2 recruiters submit you for the same job, generally the company will not ask for an interview.

Update your resume! It’s always good practice to keep it somewhat up to date in case of unexpected things like being laid off. Take the time to do keyword searches in your career field to make sure the automated resume readers flag your resume as containing the keywords needed for job openings. If you need assistance, there are tons of people who help to write resumes, search google for those services.

Finally, stay positive! Consider this an opportunity to find a company that is a better fit for your skill set or your values or the culture. Make the most of this and scrutinize companies more closely to find a good fit for you 💜

ETA 7/31/2023

Voluntary Company Buyout

If your company offers a voluntary buyout package, you can expect to see them address a few key items such as: salary, medical, PTO, stock options, and pension / 401k. Make sure the understand exactly what they're offering before accepting.

What it is: usually if your company offers a voluntary buyout package, the company is looking to do a layoff, but want to give the opportunity to give employees the ability to leave on good terms and not be laid off. Generally speaking, the company is looking to purge a specific number of people or salaries to appease the accountants. If you decide not to take the voluntary package, it does not mean you will then be laid off. It does mean you need to be prepared for that possibility, no matter how integral you are to the inner workings of the company.

Things to consider:

  • Check with your State unemployment office. Some states allow you to apply for unemployment if you accept a company buyout. Most do not.

  • Verify if you will be paid a lump sum or weekly/bi-weekly distributions for your salary. Check the tax rate, will it be taxes as regular pay or a bonus? Bonuses are taxed up to 40%

  • How long will you be covered under your medical? Does it come out of your paycheck or will the company cover the premiums?

  • Is COBRA premiums covered at all after the employer medical runs out?

  • Will your unused PTO be paid out?

  • Any unvested stock options, will you lose them or will they accelerate the vesting period?

  • The 401k you have contributed is yours, have your company's contributions vested? If not, will they be accelerated to vest before your departure date?

If you have ideas on more actions that can be taken, send me a message or add in the comments below! I will update this post with additional ideas.

99 views2 comments


Dec 04, 2022

A few things to add to your article...

When you're in a layoff meeting, the documents have been vetted and reviewed by multiple folks.  You're not talking your way out of it.

It also serves no purpose to figure out 'why me'.  You have to focus on getting your next job and moving on.

You HAVE to focus on the POSITIVE and how to turn it into a WIN.  Anything else is wasted time. I still have friends at my old firm and now I get paid to go find something new that 'could' pay more AND be more fun than my last gig.

Dec 06, 2022
Replying to

Thank you for the insight!

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