Getting laid off sucks. I know, because I’ve gone through it three times in my five total years of working a corporate job. Here’s the rundown of how they happened.
The company I worked at got acquired by a private equity firm. Having studied finance in school, I knew how private equity companies worked. I figured there would be layoffs, despite the PE firm assuring all of us there would be no structural changes in an all-hands meeting. Yea, right. Never trust the corporate-speak in all-hands meetings.
Still, despite knowing layoffs may be imminent, I didn’t actually start looking for a new job. My department was tiny and I was one of the most junior (ie. lowest paid) employees in the entire company, so I figured I was safe.
Ultimately I managed to survive the first round of layoffs, but in six months a second round came and I got the axe.
After that first layoff, I was able to find a new job within a couple months. Things were great for six months, until the industry we were in essentially crashed. The company’s finances were in shambles and budgets got slashed across departments. Again, I knew things were bad, but still didn’t take adequate measures to find a new job until just a couple weeks before I got the bad news. My entire department got cut, and while we were given some time to look for new roles within the company, ultimately I decided that staying would only delay the inevitable.
I was able to get another job quickly again after the second layoff. Three months into the new gig, though, regulations came out severely impacting the business. No one could have predicted it, and surely not me. My boss basically told me the prudent thing to do would be to start editing my resume…needless to say, that is not what you want to hear just three months into a job.
This time around, I heeded the warning signs and started looking early. I got the bad news two months later, but thankfully the job hunt was well underway at that point.
What are the big takeaways here? Never get too complacent about looking for a new job. The phrase “the best time to look for a job is while you still have a job” certainly holds true, whether you like it or not.
When the company you work at goes through a major catalyst like an acquisition, start getting your ducks in a row immediately. Even if you think you’re safe and don’t want to go through the hassle of finding a new job, you’ll be grateful to yourself if you prepare in advance.
Signs a layoff is coming
The best way to prepare for a layoff is to be aware of it happening far in advance. This way you’ll have ample time to get your resume in shape, start reaching out to your network, and seeing what opportunities are out there. The job search can be grueling and often take several months, so you want to buffer as much time as possible.
Here are some signs that a layoff may be approaching:
Budgets get cut all of a sudden. Your favorite snack is no longer being restocked, happy hours are no longer thrown on the calendar, travel is scrutinized more. All of these are signs of budget constraints and potentially looming reductions in headcount.
Your company goes through a major catalyst. A new CEO, acquisition, or merger often lead to increased “synergies” and “efficiencies.” This is usually corporate-speak for layoffs. Sometimes a company can be operating fine financially, but a new CEO takes the reigns and wants to show his value quickly. One of the ways to very publicly demonstrate this is by announcing cost-cutting efforts and layoffs. Investors and the Board of Directors typically appreciate this, which is why stock prices tend to rise following layoff announcements.
Rumors and low morale. There are always folks in-the-know, and inevitably rumors start circulating around the office about layoffs which leads to low morale. Rumors should always be taken with a grain of salt, but while the details may be inaccurate usually there is some substance behind them.
You don’t receive a pay check on time. This is another classic example of a company experiencing financial issues. If your regularly scheduled pay check is delayed, that’s a big red flag things behind the scenes aren’t great.
If one or more of these things happen, you should kick yourself into job hunting gear. Don’t get complacent like I did and think that just because things are currently fine, they’ll always be fine. Layoffs can happen extremely quickly without any warning.
You should also make sure you get your finances in order to prepare for the worst. Save a higher percentage of your take-home pay and cut out frivolous spending. Getting laid off always sucks, but if you have a 3-6 month emergency budget you’ll feel a lot better.
What to do if you’re laid off
1. Take a breather
The first thing you’ll want to do is take a breath and remain grounded. One of the reasons getting laid off is so scary is because it throws your every day routine you’ve had for so long out the window. This can feel disorienting and weird, especially if you’ve worked that job for a while.
Take a moment to re-evaluate everything going on in your life. This is an opportune time to ask yourself some of the big questions in life, like:
- Is this the career I want to continue working in?
- What do I actually want to do next?
- Should I go back to school and get a Masters or MBA?
- Where do I want to live and work next?
Sometimes getting laid off can be the catalyst you need to make that big change you’ve been thinking about. Simu Liu worked in accounting until he was laid off, at which point he decided to take his shot at becoming an actor. He’s now the lead in a Marvel superhero movie.
For me, every layoff I’ve gone through has led to a significant increase in my next job’s salary. I wouldn’t have been able to make these salary leaps had I not been forced to look for new employment. There’s almost always a silver lining when things go awry.
2. Review any documentation and discuss severance
Many companies will offer severance packages for involuntary terminations. These usually range from 1-2 months’ worth of pay, although sometimes they can be a lot more depending on your title and tenure at the company. If there is a severance package, be sure to review the insurance benefits and COBRA plans as well.
3. File for unemployment
You should be eligible to collect unemployment benefits if you’ve been laid off. Go to Google and search for “file for unemployment [your state]” and you can usually do it all online.
3. Get your finances in order
Conduct an analysis of your budget. Try to see where you can make adjustments to cut back on spending now that you’ve lost a source of income. Once you figure out your monthly spend and compare it to how much you have saved in your emergency budget, you can work within that timeline to find your next job.
4. Reach out to your network
Let your network know that you’re looking for new opportunities. Ask old co-workers or bosses out to coffees and hit up some networking events in your area. If you have a LinkedIn account, you can post a quick status update. Here’s a sample below:
“Hi all,[Company name] just went through a corporate restructuring, leading to many positions being eliminated, including my own. I’m grateful for having spent the last X years [building the team / leading strategic initiatives / overseeing sales, etc.] and am excited for what’s next. If you are looking for a [your job title] or know of any opportunities within [your field] please let me know!”
5. Apply for jobs
Once you’ve figured out what direction you want to take your career, spend a good 2-4 hours every day applying to jobs and interviewing. The interview process can take anywhere from 1-3 months at some companies, so you want to get the ball rolling as soon as possible.
When asked the interview question “Why are you looking for a new job?” the best thing to do is to be honest. Tell them you’ve been laid off and are looking for new employment. Almost everyone has either gone through layoffs themselves or witnessed them at their workplace. Layoffs are not equivalent to being fired – often they are simply totally out of your control.
Here are a couple ways to explain your layoff in an interview:
“Due to corporate restructurings, my position / department was eliminated.”
“As a result of the acquisition, I was given the option of staying within a new team or leaving on good terms. I chose the latter and I’m looking forward to new challenges.”
It’s important to provide positive answers and not badmouth your employer. Even if you’re still bitter, put it behind you in an interview setting.
6. Stay positive
Not having a job can be depressing. It’s easy to fall into a rut and spiral into negativity, so you want to do things outside of just job hunting. Do something physical like going to the gym or for a run. Go outside. Hangout with friends. Have some fun. Staying positive is not only important for your own mental health, but will also help you during the interview process.