How to Prepare for a Layoff in 7 Active Steps

May 22, 2024May 22, 2024 Darcy @ We Want Guac good job guide, prepare for a layoff

In a past role of mine, I sat in on a lunch with two company owners and another executive. All three of these guys had gone through layoffs before; they told me to expect it at some point in my career, as it’s a given you’ll experience it in a 40+ year career span. I go into the details of the steps you can take to prepare for a layoff farther down in this article. To summarize, here they are before getting into the nitty-gritty:

Increase your emergency fund. Assume you will need 1-3 months of spending saved at minimum.
Refresh your knowledge on going market rates for roles comparable to yours
Answer some hard questions about whether you’re willing to take a pay cut in your next role
Research your rights. Does your state have laws that regulate your compensation in the event of a layoff?
Prepare to negotiate for a severance package
Update your resume and LinkedIn profile
Let recruiters and connections know you’re open to work

I’m writing this as of May 2024. We’re not even halfway through the year yet and there are several dozen organizations enacting mass layoffs. Loads are household names including Microsoft, Google, and the United States Army (????). The lists I’ve looked at only compile layoffs from high-profile companies. There are hundreds of smaller ones that are also laying off their employees. It sucks, especially when it hits close to home. Or home itself, as the case may be.

My Brushes with Layoffs

My company has been sloooooowly been laying off employees since at least last year. It has nothing to do with company profits; I won’t be too detailed in the interest of privacy, but a recent development in our niche has sent our profit margins way up. Whatever the reason, I have yet to be given the metaphorical pink slip.

But others have. Others that have more to lose than I do, and who gave more to the company than I ever did.

One was laid off in January. They’re from a team that has a constant shortage of people that affects the rest of the company operations. Because of that, I thought it as weird they’d lay off one of these much-needed individuals. (This person is also the most visibly openly queer person which made me go “hmm”.)

The other was laid off in March. This one came as an utter surprise to me because this person was promoted twice in the same time span I’ve kept my job title. They trotted into the office multiple times a week during the return-to-office push with nary a complaint; in comparison, I fled (the country) far enough away from our office locations so I could switch to working fully remote. I also considered this coworker as the go-to for a massive public-facing marketing program of ours.

For them to be laid off without warning seemed out of left field.

I was not expecting that at all. Judging by the fact I was in the middle of launching new projects with this person, I’m assuming they were not expecting it either.

If this wasn’t enough to wonder about my own job security, the new job ads on LinkedIn certainly guaranteed it! Our company recruiter posted a job ad for a marketing position in Boston, when the only Boston marketing team is the one I’m on… and no one has mentioned adding a new member. Let alone, actively looking for someone whose job responsibilities sound like a vague version of mine.

HMMM. INTERESTING.

In a humorous turn, the job’s been posted three times in one month and then taken down again. One of those had garnered 90+ applicants, yet not a word about a new hire. Makes me wonder if they assumed they would find someone to do my tasks for cheaper and realized they could not. 🙄

Now, let me be clear I’m not worried about my job. Even if they did lay me off, I learned from another laid-off coworker that the company is generous with their severance package. I’d also be eligible for unemployment, if it comes down to that. Which is all without considering I’ve got a healthy investment portfolio; it’s one that can tide me over for a long time if necessary. Whether I keep hanging onto my job or not, I’ll end up alright.

And one of the biggest reasons I’ll be alright is because I already know how to prepare for a layoff. I’ll share that with you all here to help you in similar circumstances.

The Signs to Know When to Prepare for a Layoff

The following assumes you’ve gotten warning about potential layoffs ahead of time. At least a month’s warning is ideal, but this plan can still be tweaked for a smaller time runway. Some warning signs might include:

Learning of others being laid off in your company
Seeing your job responsibilities posted in an ad
Poor financial projections
A noticeable uptick in higher-up, closed-door meetings
A tense office environment when it wasn’t this tense before

If this is the case for you, here’s what you can do now to prepare for a layoff land on your feet.

1. Increase your emergency fund. Assume you will need 1-3 months of spending saved at minimum.

This will look different for everyone, depending on how much you typically spend each month. If you’re not sure or if you don’t currently have a budget, now is the time to take care of that as well. However you can manage saving this extra amount, it’s very much worth it. This means you’ll have a big worry taken off your plate in the interim between losing one paycheck and gaining another.

2. Refresh your knowledge on going market rates for roles comparable to yours

Check out current job ads out there for positions that are similar to the one you’re about to leave. Take the title variations listed and plug ‘em into Glassdoor and Salary.com with your local city/region. That way, you’ll know what you can expect in regaining a role like it.

3. Answer some hard questions about whether you’re willing to take a pay cut in your next role

The job market is in a very weird place right now. Every time I look at my LinkedIn feed, I see new people affected by layoffs who are struggling hard to find new employment. If you become one of them, you should know you may have to take a role that is not similar to your last one. As you prepare for a layoff, ask yourself:

Would you be okay with taking a pay cut in your next role?

How many months can you go until you decide to accept a pay cut?

Is this the time to pivot to something new altogether?

This might be the most difficult step to take on this list, but also one of the most important. You very much want to have a backup plan if things do not go so smoothly post-layoff.

4. Research your rights. Does your state have laws that regulate your compensation in the event of a layoff?

Back in the 80s, the federal government passed the WARN Act (Worker Adjustment and Retraining Notification Act). In a nutshell, most large companies have to provide 2 months’ notice “if they conduct a qualifying mass layoff of at least 50 employees (including indefinite furloughs)”. Failure to comply with this means owing you, the affected employee, a severance payday. About 12 states have their own versions of the WARN Act and it’s worth it to check if your state is one of them.

Should your company offer you severance, there are certain rules they cannot break. One example: they cannot force you to sign an NDA as a condition of receiving severance. I am not a lawyer so I’m not qualified to offer further advice, but understanding things from a legal perspective helps quite a bit.

5. Prepare to negotiate for a severance package

Speaking of severance, that is just as up for negotiation as your salary was when you first joined. The usual approach is to offer you severance based on how many years you’ve worked at the company over an amount of weeks; that might translate to two weeks’ of severance per year worked. Read up on what’s usually offered in a severance package and determine what you’d like to negotiate should the actual offer fall below your expectations.

6. Update your resume and LinkedIn profile

You’ll want to tailor your resume and LinkedIn profile for the roles you most want. Besides marketing yourself as a must-hire-immediately to other organizations, you’ll also want to connect with your current coworkers. You never know where your paths may cross again, or whether they’ll think of you for a position down the line. For details on what to say on your resume and profile, there’s more info in past articles here:

7. Let recruiters and connections know you’re open to work

With a polished resume and LinkedIn profile, you’re not necessarily fated to endless job applications sent into a black hole. Layoffs are not the stigma they once were; it might actually be, for hiring managers, the most preferable explanation for why someone is out of work. Recruiters worth their salt can and will put you directly into the interview pipeline for roles they matchmake with your skillset.

In order to maximize that advantage, flip the switch in your LinkedIn settings that tells recruiters you’re open to work. Adding the “#opentowork” green banner to your profile photo helps you reach a further audience of small business owners who have open roles, but might not be working with recruiters. And, as always, letting others know you’re searching for a new role will keep you top of mind for them when one opens up.

In this world we’re all born into, planning for bad scenarios makes their impact much less sharp if and when they do hit. If you prepare for a layoff now, you will be much less panicked and less stressed once it does take place. If layoffs truly are a guarantee in your working career, why not put measures in place to help you in that time? No one can predict the future (much as I try to) but planning for the future makes it come at you a little more gently than otherwise. Best of luck, and hope all goes well in your career ahead.

Cover image credit: DESIGNECOLOGIST via Unsplash