Worried About Layoffs? Career Experts Weigh In
Layoffs can be a scary prospect for employees. Discover how to recognize the signs of an impending layoff and what to do if you are laid off.
- With layoffs sweeping across industries this year, many are nervous about job security.
- A company's need to cut expenses is one of the most important contributing factors.
- If you're worried about a layoff, update your resume and LinkedIn as soon as possible.
- If you are laid off, carefully review your severance package and notify your network.
Sweeping rounds of layoffs have hit many industries this year, including at big companies. Re/Max cut almost a fifth of its workforce, and Shopify eliminated 10% of its employees. Many people are understandably anxious about the possibility that they, too, will be laid off. If your company decides to let workers go, it is essentially outside of your control. However, there are some things you can do to minimize your discomfort and prepare yourself for the worst-case scenario.
Read on to learn about factors that can lead to company layoffs and red flags to keep an eye out for. Discover how to put yourself in the best possible position in case you lose your job and what to do if you're one of the remaining employees still working at your company after a layoff.
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Factors That Contribute to Layoffs
Jenine Smith Jenkins is an experienced HR professional and founder of J. Smith & Co, which provides HR consulting and other related services. She cites a company's need to cut expenses as the most important factor leading to layoffs.
In other words, if a company has started to cut back on either nonessential or essential expenses and still needs to save money, leadership will begin evaluating payroll to see where else it can save.
Sarah Rodehorst, CEO of Onwards HR, explains that layoffs may also happen due to organizational changes. If a company pivots in a new direction, phases out a product line or offering, or restructures after a merger or acquisition, the senior team may decide a layoff is necessary to support these changes.
Potential Warning Signs a Layoff Is Coming
The most obvious sign a layoff may be looming is that your company starts cutting expenses. Rodehorst also cites increased tension as a potential red flag. If you start to notice managers and executives seem more stressed than usual, that could be a sign.
Rebecca Weaver, founder and CEO of HRuprise says that companies typically try as many tactics as possible before they resort to layoffs. Here are some other indicators she's found that may indicate a company is in trouble:
Talk or implementation of hiring freezes; a hiring freeze is when an organization temporarily stops filling open positions
Restructuring within the company
Mergers or acquisitions
Internal rumblings or rumors among employees
News reports indicating the company is in financial trouble
Declining stock price, if the company is publicly traded
Reduction or elimination of contract and freelance positions
Voluntary pay cuts across management
None of these are 100% sure signs that a layoff is coming, but a layoff could be on the horizon if you notice many of these indicators. While no one wants layoffs at their company, knowing ahead of time can give you time to prepare.
What to Do if You're Worried About Layoffs
If you're concerned about losing your job, the first thing you can do is look at your budget. Can you save more money than you currently are? Do you have an emergency fund to cover a few months of expenses?
"If you are laid off and have anything saved, it can help you bridge gaps you have in severance or unemployment benefits."
— Smith Jenkins
Once you've mapped out a plan for your finances, update your resume and get it ready in case you need to send it out. Organize your past performance appraisals and ensure you have an accurate list of what you've accomplished at your current job.
Then, use your resume to update your LinkedIn. Start engaging with your network and consider asking for LinkedIn recommendations to bolster your profile. "It's easier to ease into this than to start only when you need something," Jenine says.
Actions to Take If You Are Laid Off
If you find out you are being laid off, here are some tips:
Carefully review your severance package. Be sure that the documents accurately reflect your years of service. If you have questions, ask them as soon as possible and consider consulting with an attorney if you need additional clarification. You should understand the amount you'll be paid, how long your benefits will continue, and any information they need from you to execute the agreement.
Don't sign your severance package right away. Weaver says, "You are allowed time by law to review the terms. A severance agreement is a tradeoff, so everything is negotiable." That means you may be able to ask for more money, coverage, legal rights to your work, or better equity. She also points out that accepting the severance agreement means giving up your right to sue the company or talk about your experience working there, so make sure you're okay with that before you sign.
Research unemployment insurance in your state to find out what benefits you're entitled to and learn when you can apply for unemployment. If you're receiving severance pay, you may need to wait before you're eligible for unemployment.
When you're ready, let your network know about your situation. Be clear about what jobs you're open to; you never know what might surface as a result. As Smith Jenkins explained, "Over 60% of job seekers find their next role within their networks, and a lot of times, that position hasn't even been publicly posted yet."
Try to maintain perspective. While this is a difficult situation, you're not alone in going through it, and you will come out on the other side. The future could hold many exciting opportunities, and you will feel better as time goes on.
If you've been laid off and would like more help, check out Weaver's comprehensive layoff guide.
How to Navigate "Surviving" a Layoff
If your colleagues are laid off, but you retain your job, you may have mixed feelings. You might feel relieved that you still have a job but also sad and perhaps guilty that your coworkers are gone. This is normal. Some call it survivor's guilt.
Adjust to your new work situation over time, and be gentle with yourself. If you're struggling to process your feelings, consider talking to someone you trust or seeking help from a professional.
Even as you remain in your role, look for ways to grow professionally and gain new skills. There may be future layoffs, and it's wise to be proactive and set yourself up for success.
Frequently Asked Questions About Layoffs
What questions do you ask when you're laid off?
Depending on your role, if you're laid off, you may want to ask some of the following questions:
- When is my last day of work?
- Will I receive payment for my existing vacation time?
- What does my severance package include?
- Are there any other positions within the company I may be eligible for right now?
- Does the company offer any resources to help me find my next job?
What is the first thing someone should do if they are laid off?
The first thing you should do after you're laid off is to review your severance package — but don't sign it right away. Be sure that your severance package accurately reflects your years of service and that you understand what benefits and pay are being offered. Remember that severance packages are a tradeoff; in signing one, you give up your right to later sue your employer, disclose details of your employment there, and more.
How do you ask about layoffs in an interview?
If you're interviewing at a company that has recently laid off employees, or if you see some warning signs happening at the company, ask the interviewer for the reasoning behind the layoffs. You can also ask if the interviewer foresees stability within the company as it relates to the role you're interviewing for.
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