If you are reading this article, you are either fearing a layoff or you have already been laid off.
In both cases, first, you must know that it is far from being the end of the world. Every adversity has an opportunity hidden in it.
You just have to move on!
In this article, we have included all the information and advice that you may need to go through the difficult situation of a layoff.
What Does It Mean to Be Laid Off?
Essentially, a layoff can mean a difficult road ahead. But technically, it means temporary or permanent termination of your job despite you doing nothing wrong.
Yes, being laid off means you do not have your job anymore. However, you should know that you were not fired.
Your job has been terminated, but there’s an essential difference between being laid off and being fired.
Difference Between Laid Off and Fired
There is widespread confusion between these two scenarios.
Although many consider them to be the same, they are in fact, far from being similar.
Let’s put it in simple terms.
- Layoffs occur due to reasons relating to the financial or organization scenarios the company you are working for is facing right now.
- Firing occurs due to reasons directly related to you and the job that you do in the company.
- You may be laid off as part of a downsizing process or a managerial change within your company.
- A layoff can also occur in masses where a lot of your colleagues are laid off at once.
- Firing may occur due to your inefficiency, mistakes, or general mismatch with the position you were holding within the organization.
So, essentially, a layoff happens for reasons beyond your control, whereas firing usually occurs due to situations related to you.
We’ve summarized the main differences between being laid off and fired in the graphic below:
Difference Between Laid Off and Termination
Here’s yet another confusion that many often face. So, let’s clarify.
The legal definitions of these terms may vary by state due to different labor codes, but the general perception remains the same.
- “Termination” is the umbrella term which includes all other concepts like separation, getting fired, and resignation.
- A termination can be initiated by both the parties involved.
- The layoff process is always initiated by the organization.
- A layoff can be temporary, but termination is usually permanent. So, pragmatically speaking, permanent layoffs are also a type of termination.
All this information is quite enough to get you covered on the basics of layoff. It’s all you need to know about the definition and technicalities surrounding a layoff.
Laid Off or Layed Off?
Wait! This is another tiny bit of confusion that might need a bit of attention.
We briefly wanted to clarify that the correct spelling is… “laid off”.
While “layed” is a very common spelling of the past tense of “lay”, it is not the proper spelling.
Possible Reasons for Layoffs
There is a multitude of reasons why a company may decide to layoff employees.
Here are the most common ones:
- Lack of funding or cost-cutting: The organization you are working in may suddenly be facing a monetary challenge and can not afford to pay you anymore. Hence, you are laid off. Cost-cutting is one of the major challenges of almost every organization. And often, the employees have to bear the brunt of being laid off.
- Lack of work: The unit or department you were working for may no longer be needed in the company. Or, the specific kind of work may no longer be feasible for the organization.
- Mergers: Mergers can mean major organizational changes within a company. So, it is natural that some employees may become irrelevant after mergers.
- Outsourcing or offshoring: With the rise of the gig economy, outsourcing jobs has become a major reason for employee layoffs nowadays.
- Other changes: Some other major changes like new management or relocation can also result in some employees being laid off.
However, it should be mentioned that every organization is unique with its own unique set of issues. So, a layoff can happen for many other reasons not mentioned above.
What is a Voluntary Layoff?
Amidst all these details about layoffs, one of the most tricky terms is perhaps voluntary layoff.
How on earth can a layoff be voluntary?
They can be when your employer requests you to voluntarily resign or retire in exchange for a retirement or severance pay package.
Voluntary layoffs are often organized by companies who do not have any specific group of employees to be laid off and also do not want the burden to specifically choose and inform employees about the bad news.
In this case, the company provides the employees with an open offer to resign in lieu of a costly severance deal.
It is most suitable for companies who are looking to cut costs with layoffs because it is often the senior employees with higher salaries who opt for early retirement.
Available Financial Compensation During Layoffs
The first thing that comes to mind after hearing the word layoff is probably financial stability.
What will happen to your bills now that you are not going to get your monthly salary?
Well, no worries! You are probably not going to become homeless. There are plenty of options to tap into until you get your next opportunity.
1. Money That Is Rightfully Yours
This is the amount of money that you have already earned while working for the organization but have not been paid yet.
- Your final paycheck(s)
- Unused vacation, sick time or leaves according to company policies
- Retirement funds
- Any expense reimbursements
- Others funds and expenses that you may be entitled to
Make sure you have a detailed review of all these monetary issues with your HR before you leave the office.
2. Severance Pay
It is likely that your company will offer you a severance package that may include severance pay, continuation of insurance, and assistance for career counseling to find your next job.
You may also have the option to negotiate your severance package and solicit the help of an employment lawyer if you want.
3. Unemployment Benefits
Another potential financial option for you would be to file for unemployment.
Each state has its own unemployment program with different sets of rules, guidelines, benefit amounts, and benefit durations.
So, contact your state labor department as soon as you are laid off.
If you face any problems during the course of calculating and collecting your finances, you should consider seeking the help of an employment lawyer or a person who is familiar with these situations.
How to Prepare for a Layoff
When a company is going to lay off employees, there are often some signs of it beforehand.
That’s exactly when you have to start preparing for the worst. Even if you are not on the list to be laid off, a little preparedness wouldn’t hurt anyone.
This graphic gives you a summary of how to prepare for a layoff:
Here are the detailed steps you should take in the event of a possible layoff.
1. Be Mentally Prepared
The shock of a sudden layoff can drain you mentally and make you take inappropriate steps.
So, it is always a good idea to prepare yourself mentally for a possible layoff.
Remind yourself once again that it is not at all your fault. It is just one of the curveballs that life throws at us and we have to rise to the challenge.
You just have to be brave and believe that better opportunities are waiting around the corner.
2. Start Financial Planning
It is the thing that you should always do – plan your finances right.
But when faced with a layoff, finances become even more of a crucial aspect to think about.
Start by assessing all of your wealth and prepare a financial plan of at least three months.
Include all the financial options described above into your plan and things will start to feel better.
3. Start Searching for Better Opportunities
It is another great idea when you face a potential layoff scenario.
You should start networking and be on the lookout for new and better job opportunities.
Even if you are not laid off, you may find an even better job offer from this endeavor of yours. You never know.
However, never search or apply for jobs via your office network while you are still working there.
Your employer may have access to your browsing history and you wouldn’t want them to know what you are up to.
You can start your search with the Best Job Search Sites (Pros and Cons).
What to Do Immediately After a Layoff
Okay, so the moment of truth has arrived and you will be laid off. It is not the time to lose your cool.
Stay calm. You have a lot of things to take care of.
We have provided an overview of what to do immediately after you are laid off.
Read on for detailed information about your first steps after a layoff.
1. Check That You Were Properly Compensated
It is time to have a talk with an HR representative.
Ask for the details of your severance package and any other compensation that you will receive.
Ask for the details of all of your final paycheck(s) and double-check them carefully.
Calculate your final paychecks, paid vacations, earned leaves, any other expense reimbursement, and other amounts due carefully.
Solicit assistance from your state’s labor department or an employment lawyer if you face any difficulty.
2. Get Proper Documentation From HR
Another thing that you have to do is to get the proper documents from your HR department.
Make sure that you are given a letter stating you were laid off and not a firing letter. Also, request a proper letter of recommendation from your former employer.
It is always better to end your relationship in an amicable way so that you retain your employer as a reference for your future job search.
3. Claim Unemployment
As you have lost your job due to no fault of your own, you are likely to qualify for your state unemployment benefits.
Unemployment benefits are provided by the state unemployment program for a specific period.
Eligibility criteria vary from state to state but a few common rules may mandate that you were employed for a certain amount of time, you were not an independent contractor, and you lost your job through no fault of your own.
If you receive a severance package, check to see how it affects your eligibility for unemployment benefits.
To learn more and apply for the benefits, you may start the process by visiting the website of your state’s labor department. Just google “(state name) unemployment” and you will find it.
Many states have a waiting period before you can start receiving benefits, so it is better to deal with the formalities as early as possible.
4. Secure Health Insurance (COBRA)
The next thing to do is to ensure that you are covered by health insurance until you find your next job.
Consolidated Omnibus Budget Reconciliation Act (COBRA) ensures that you retain your employer-sponsored health insurance benefits for a period of time, usually 18 months, after losing your job.
Although it entails that you have to pay the portion of the coverage that your employer was paying, it can be better than an individual health insurance plan or having no insurance at all.
How to Recover From a Layoff
Now that your official ties with your former employer are over, it is time to regroup and mobilize your resources, skills, and connections for a prompt recovery.
Use this checklist for actions to take to recover from a layoff:
Below is more information about your next course of action.
1. Know That It Is Not Your Fault
After being laid off, it is easy to fall into the trap of a negative feedback cycle that can drain your confidence and mental vivacity, which you will need a lot of in the coming days of job hunting.
Hence, keeping yourself away from all the negative thoughts and emotions is of paramount importance.
Never judge yourself because of a layoff and always remember that it was in no way your fault.
Keep your head high and senses sharp to be ready for the next opportunity when it shows up!
2. Assess Your Financial Situation
Having a careful reevaluation of your financial affairs is a wise thing to do after any major reshuffle of your income sources.
After getting all the compensation from the layoff in your account, assess your financial resources. How much do you have? How long can you last?
Then, have a plan of spending for at least the next three months according to your available resources.
It is always better to be a bit tight while planning your expenditure during these times, as the more you save, the longer you can stay without more earnings.
So, stick to spending only on the essentials and stay away from any major buying and investments.
You may also consider avoiding eating out at restaurants and other “nonnecessities.” Check for entertainment subscriptions or other services that you can pause for some time or cancel, check the possibility of pausing or reducing your mortgage payments, and any other options that may help in cutting down your spending.
3. Make Decisions on Retirement Funds
As you are leaving your current employer, it is a suitable time to check the status of your retirement plan.
How much your money has grown? What are you invested in? What to do with it now?
Usual options include rolling over to your next employer or an individual retirement account (IRA), keeping it where it is right now, or cashing it out. Cashing out your retirement fund early means paying taxes and early withdrawal penalties.
Give a proper amount of consideration to this before making your decision.
Once you have taken care of all the immediate concerns after a layoff, it is time to embark on a journey to recovery.
4. Search for Part-Time or Freelance Work
After the assessment of your financial standing, if you think you will need additional assistance to keep yourself and family afloat, you can always opt for part-time or freelance gigs.
There are plenty of freelance sites where you can easily create a profile and get a job in only a few days. Look into platforms like Upwork, Fiverr, Freelancer, and others. Yet another easy but a bit less rewarding way of getting some extra bucks can be doing some micro-work on Amazon Mechanical Turk.
Finding part-time jobs is also relatively easier and faster than securing a full-time opportunity.
However, if you are not so shaky in terms of finances, it is better to remain a full-time job-seeker as long as you can manage.
Full-time job-seeking will enable you to be fully focused on the search and invest more time on professional development. You are likely to get a job faster that way.
5. Rethink Your Career Plans
Take a deep breath, relax, and look back at your career.
Who are you? Are you happy with what you have been doing?
If you are happy, then it is an opportunity to take a greater leap ahead. If not, then this is an even better opportunity to re-evaluate your career path.
Now, you are free to change tracks.
So, have a deep assessment of your skills and expertise and create a shortlist of possible options for you.
Identifying all of your preferred job positions and industries will make your search for a new job much easier.
Find some great options for new jobs in our article, Best Jobs For a Career Change.
6. Update Your Resume
Dust off your old resume. It is time for a revamp and a new beginning!
Create separate resumes for all the job positions that you plan to apply for.
The days of a single resume for all jobs are long gone. If you fail to fully customize your resume for each of the roles you apply to, it will not be effective.
Moreover, it is better to be prepared, as you may not get enough time to customize your resume when someone asks for it.
You may create and customize your resumes with online resume builders using templates. You can easily review and customize your resume via online resume review services.
Consider a professional resume writing service if want your resume to truly have an impact.
Find the best professional resume writing services near you and for your industry.
7. Keep Searching for Your Next Job
Okay, so you might have sent out your resume to a few people and didn’t get any reply.
So, what? Will this get you down or will you try even harder?
Applying to a lot of jobs but not getting a reply is pretty common in today’s world of disruptive tech-based recruitment.
But getting no replies from recruiters can be painful and make you doubt yourself. It is yet another quicksand of a downward spiral that you must avoid.
Just keep trying as if searching for a job is your job now. A better career is waiting for you!
8. Online and Offline Networking
Networking can be very helpful in your search for a new job.
It has been estimated by Business Insider that over 85% of open positions are filled through networking and around 70% of jobs never get listed.
The stats are simply staggering and show that without networking you can miss out on some great opportunities.
Be on the lookout for any networking events where your industry folks are likely to be. Go, talk, and meet with them with an open mind.
Moreover, never underestimate online networking platforms like LinkedIn and other social media channels when it comes to building easy and fast connections.
Get some job search advice in this article, How to Connect with Recruiters on Linkedin.
9. Keep an Eye on Your Routine and Lifestyle
Being laid off means a huge change in your routine and overall lifestyle.
It can easily make you unfocused if you do not stay alert.
But being grounded on routine and organization is crucial for your mental and physical health in challenging times like these.
Try to follow the same routine. Job search when you used to be at the office, keep going to the gym, the art class, or whatever you were doing, eat your meals around the same time, and be mindful of getting the proper amount of rest.
What Not to Do After You Are Laid Off
We have discussed a lot about what to do after a layoff. Now, let’s have a look at what you should not do after being laid off.
Here is a synopsis of what no to do after you are laid off in order to stay on the right track.
Read on as we explain the pitfalls you may encounter after you are laid off.
1. Avoid Negative Thinking
No matter how many times we mention it, the importance of this aspect just can’t be stressed enough.
It is very much essential to remind yourself time and again of staying away from any negative thoughts.
Remember three things about bad times:
- Everybody faces them.
- It never lasts.
- Worrying won’t help you in any way possible.
2. Do Not Keep Your Layoff a Secret
Another silly mistake that we often end up doing is that we tend to hide the fact that we were laid off from our friends and family.
But doing this will only increase the pressure on your lonely shoulders.
It is in no way advisable to hide this important development from the people around you.
The best thing to do is to share it with others and being open to their advice, help, and support.
3. Don’t Blame Your Employer Publicly
You are probably wise enough to not do it. Still, a word of caution for those vengeful angry thoughts you might be having right now.
It is normal to feel anger, but you should not express it publicly.
Always remember that your future employer may contact your former employer before giving you a job. So, you don’t want to hamper your relationship with them.
4. Don’t Shy Away From Your Support Network
Back to basics.
We are social beings and we need each other to survive. So, when in distress, we should not shy away from asking for help from our friends and family.
You may also reach out to your extended network of other personal and professional connections, i.e., former colleagues, mentors, and teachers.
Apart from getting possible referrals to jobs, your social network will get bolstered from this anyway.
Should You Take Legal Action After a Layoff?
In most situations, probably not. But there may be situations when you may need some legal help.
Wrongful Terminations
Layoffs are not wrongful termination.
However, if you think that your employer is terminating you violating rules and terming it as a layoff, you should probably seek legal help.
These are the common scenarios of wrongful termination:
- The termination violates public policy, company policy, or employment agreement.
- Terminated for complaining about workplace issues.
- Terminated for whistleblowing.
- Discriminatory termination due to race, nationality, religion, gender, or age.
Have you been the victim of any of these violations or discrimination? We strongly advise considering legal help.
Withheld Compensation
Another situation, although rare, that demands legal action is when an employer is unable to or refuses to pay you the due money and compensation that you are entitled to after being laid off.
If you are denied any of the payments, i.e. final paycheck, severance pay, or others, you can file a complaint with your state labor department or sue your employer.
Where to Find Help After Being Laid Off?
Finally, let’s have a quick look at the legal and professional help available to you at this stage.
State and Federal Enforcement Agencies
When faced with such an unwanted situation, it is always a better idea to look for help that you can get from the state and federal enforcement agencies.
The more help you can get from the state agencies, the more money you will be able to save for employment lawyers if you end up needing them.
Start your search from the state labor department or a nearby Equal Employment Opportunity Commission (EEOC) office. The officials there will guide you on the next course of action needed.
Employment Attorneys
If you feel that the state or federal agencies are not able to help you to the extent you want or need, you may consider filing a lawsuit or having one or two employment lawyers to back you up.
The most important word of caution is that you must have an extensive discussion about all the aspects involved especially the money they are going to charge you and other expectations.
Then, only you can decide if the time and investment will be worth the possible outcome of your case.
Additional Resources
If you have been laid off or need help with job searching or any other career-related issues, you can always reach out to Find My Profession for assistance.
Here you will get professional and experienced career experts to get you to your next big job.
