Surviving Unemployment: What to Do if You are or May Be Laid Off
After a year of major layoffs in 2023, when more than 300,000 Americans lost their jobs across industries such as tech, finance and media, we’re all hoping for a more stable 2024. After all, we avoided the major recession economists were forecasting. However, companies including Google, Microsoft, TikTok, the LA Times, Salesforce, REI, Wayfair, Macy’s, Meta, Amazon and Riot Games have laid off employees in a variety of fields this year.
What should laid off workers do if they find their job eliminated? What can you do if you’re employed now, but suspect job loss is on the horizon? We’ll break down steps you should take if you are laid off or are worried a layoff is imminent.
13 Things to Do If You’re Laid Off
Getting laid off can be scary, but don’t panic. Take a deep breath, remind yourself it will be OK, then get to work. Here’s what to do if you’ve been laid off:
1. Prioritize Mental Health
Being laid off stirs all kinds of emotions: guilt, anxiety, frustration, you name it.
“People tend to be quite hard on themselves after a recent layoff,” said Courtney Morgan, Licensed Professional Clinical Counselor (LPCC) and founder of Counseling Unconditionally. “They often struggle with questioning what they did wrong, if they’ll find a comparable job or if there’s something inherently wrong with them that led to this happening. I encourage individuals to allow themselves to feel disappointed, let down and even scared. The more that they try to push these natural emotions away, the stronger they will pop up.”
A sudden loss of income might make you feel tempted to cancel therapy appointments, stop paying for anti-anxiety medicines and spend every waking second applying for jobs.
But working on your mental wellness during a layoff is crucial. Stay on medications, keep going to therapy, get outside, work out, visit friends and family, and meditate. Morgan recommends experimenting with new creative endeavors and journaling to keep your brain engaged.
Prioritizing mental wellness on a budget? Here are ways to get low-cost or free mental health care without insurance.
2. Head to the Doctor and Shop for Health Insurance
Physical health also is important after a layoff. Your health insurance coverage will eventually expire following a layoff. See a doctor and dentist while you still have health insurance coverage through your former employer.
While we’d like to think the layoff is temporary, some people take months — or years — to find a new job. Just in case, purchase basic health insurance coverage for you and your family for this interim period.
3. File for Unemployment
Apply for unemployment benefits as soon as you’re laid off. You likely won’t receive as much as your paycheck, but every cent helps to stay afloat. Each state administers its own unemployment insurance benefits, so you’ll need to use your state’s resources to determine how to apply, how to keep benefits active and how much you’ll receive.
Filing for unemployment is relatively easy, and the payments can start quickly — crucial if you’re living paycheck to paycheck and don’t want to fall behind on bills. Check out our guide to unemployment.
4. Get Into a Routine
When you no longer have to wake up for the morning commute (or even wear pants!), it can be easy to sleep in, spend the day on the couch and get little to nothing done. It’s important for your mental health (and productivity) to establish and stick to a healthy routine.
Maybe that means waking up each morning to walk the dog, then make breakfast and spend a few hours applying to jobs. Stay active and motivated!
5. Get a Balance Transfer Credit Card
If you have high-interest credit card debt and no income beyond your unemployment benefits, the debt can quickly spiral out of control. See if you qualify for any 0% intro APR balance transfer credit cards and move the debt over.
Then stop using credit cards. Only purchase things you have the money in your bank account for. The best balance transfer credit cards offer 12 to 21 months of no interest on any balances you transfer, giving you time to pay off that debt without accruing additional interest after your layoff.
6. Pause Discretionary Spending
Being laid off is tricky. It’s important to have fun, but everything in moderation. If you have multiple streaming services, consider canceling all but one. If you have a European vacation scheduled soon, you could postpone that for a year and instead do a cheaper getaway to a nearby city.
No one can know for sure how long a layoff will last. Your safest bet is to cut costs wherever possible.
7. Stash Your Severance Pay
If your current employer offers you severance pay as part of your layoff, put as much of it as you can in a high-yield savings account, accessing it only when you need it to pay necessary bills. You never know how long unemployment will last, so try not to burn through your severance pay.
A severance package will often include more than just money to temporarily cover lost wages. Some employers extend health insurance coverage to former employees for a set amount of time, and others may offer outplacement services. You may also be able to negotiate your severance package when you are laid off.
During severance negotiations, ask about unused vacation days — many employers will pay those out.
8. Don’t Forget Your 401(k)
If you have a retirement account through your former company, you can typically get a lump sum payout, which can help you cover expenses while you’re job hunting. Alternatively, you can roll over an employer-sponsored 401(K) into an individual retirement account (IRA) or a new 401(k) with a new job.
9. Rely on Your Network
Starting from scratch during a job search can be frustrating. Applicants are fighting for the same jobs you are. Getting your foot in the door is easier if you get help from a colleague.
That’s why it’s important to maintain professional relationships. Help former colleagues and connections when they’re searching for a new job — and they might be willing to help you when you’re laid off and in need of work.
You may also be able to utilize career services from the college or university you graduated from.
10. Update Your Resume
Your resume is your first impression with prospective employers, so make yours sing. In fact, if you’re applying for different types of roles in different industries, you might want to have separate, tailored resumes.
If you haven’t touched your resume in years, work with a trusted colleague or career counselor if you’re not sure where to start.
“A common mistake employees make when updating their resume after being with a company for a long period is not prominently separating the different jobs held and for how long at the company,” said Cierra Gross, founder of Caged Bird HR. “By laying out each role as if it were a completely new job on your resume shows career progression and more clearly defines your impact in each position. Job seekers should also be sure to clearly identify the value they added in each role as opposed to simply listing job duties.”
11. Apply for Jobs
Start your job search as soon as you can, and commit yourself to applying for jobs, prepping for interviews and expanding your skills for a set number of hours each day. Treating your job search like a new full-time job can help you get a new job faster.
Sites such as LinkedIn, Indeed and Glassdoor are great for conducting your job search, but you can also find job boards more specific to your industry. Make your resume stand out by tailing it to the company and role you’re applying for, and consider adding a cover letter that details why you’d be a good fit.
If you make it to the interview round, follow up with a thank you to the recruiters and hiring managers to leave a lasting impression.
12. Get a Temporary Job
Getting a job within your industry that pays well and offers the benefits you need might take a while. In the meantime, get a temporary job, even if it’s not in your field or at the pay rate you’re looking for.
Many industries are hiring for basic data entry, manual labor and customer service. Snag one of these jobs for now to help pay the bills, and bid it adieu when you find the right long-term role in your field. Start your temporary job search at these work-from-home companies.
13. Consider Freelance Work
Another way to stay busy, maintain income and avoid gaps on your resume is to convert your skill set from your former employer into a marketable service as a contractor.
In content creation or graphic design? Leverage contacts from your former employer as well as connections on your LinkedIn profile to launch a freelance writing or design business. Have experience in sales, website design, social media, IT or content marketing? Become a contracted consultant to decision makers at major companies. Depending on your background, you could get certified as a substitute teacher or online tutor.
If you can’t find freelance work within your industry, you can take on other contractor labor during your job search. This includes food delivery to rideshare to dog walking and handyperson services.
Not every job in the gig economy is equal. Here are the best side hustles to consider during your layoff to make the most cash.
7 Things to Do If You’re Worried You Might Be Laid Off
It seems like every time you open LinkedIn or turn on the news, you’re hearing about another major layoff.
If you suspect your company might be looking to layoffs in the near future, here are a few things you should start doing.
1. Make Yourself Crucial to Operations
Each company makes layoff decisions differently, but it’s a lot harder for a business to lay off someone who is the sole expert in a part of the business, especially if it’s crucial to how the company operates. Start growing your skills and knowledge, and volunteer for projects that keep you essential.
There’s no guarantee this will keep you safe during layoffs, but it may increase your odds of surviving the next round.
2. Build Your Emergency Fund
If you don’t already have an emergency fund, start building one now. Experts recommend anywhere from three to six months worth of necessary expenses (mortgage or rent, transportation, groceries, health care, debts, etc.).
A high-interest savings account is your best bet for growing your emergency savings quickly. Here are the best high-yield savings accounts to boost your emergency fund.
3. Cut Back Expenses
To boost your emergency fund, cut back on expenses. If you dine out often, limit yourself to once a week — and stick the extra cash in your savings account.
After all, if you do get laid off, you’ll likely have to cut out a lot of unnecessary expenses. This gets you into the habit before it’s necessary and can put you on better financial footing if you do indeed get laid off.
4. Get More Active on LinkedIn
Networking is a long game. If you get laid off, you’ll be grateful you’ve already started planting the seeds and growing your network on LinkedIn. Share insightful articles, comment on others’ posts and follow leaders at companies you’d be interested in working for.
Make sure your profile tells a story and includes career highlights that showcase your abilities.
5. Update Your Resume
While you’re on LinkedIn, you might as well start polishing your resume. That way, if you do get laid off, your resume is ready to roll and you can start applying for jobs right away.
If you’re going to apply for roles in multiple industries, have multiple resumes ready that each are tailored to a different industry and show off appropriate accomplishments.
6. Expand Your Skill Set
Take online courses, teach yourself a new program or volunteer for new projects at your current job. The more diverse your skill set, the more appealing you’ll be if you ever find yourself laid off and in need of a new job.
7. Start Applying for Jobs Now
If you suspect you could be laid off in the coming months, you don’t have to wait for the other shoe to drop. Be proactive about your career — after all, it’s your career, not your company’s.
If you haven’t yet been laid off, you have the luxury of applying only to jobs you feel you’re passionate about (and that will pay the bills). This could change if you’re laid off, when you might be more tempted to apply for anything.
If you interview with another company and get a job offer, just make sure that company is not also on a path toward layoffs. If they’re in good shape, give notice at your current company and start your new gig without the looming threat of a layoff weighing over you.
Recap: What to Do When Laid Off
Layoffs take you on a roller coaster of emotions, and it’s OK to fully go through those emotions. But then it’s time for action.
If you’re laid off, work with your former company to understand how your severance benefits work and when you’ll receive your final paycheck, then file for unemployment, update your resume and search job boards. Stay active with your network, reach out to hiring managers and focus on your mental wellbeing.Need help with the job search? Use our guide to job hunting.
Contributor Timothy Moore is a writer and editor in Cincinnati who covers banks, loans, insurance, travel and automotive topics for The Penny Hoarder.
