In 2023, the U.S labor market has been hit with an unsettling wave of layoffs, and many individuals are now grappling with the harsh reality of unemployment. This year alone, multiple industries - from Big Tech to Detroit's Big 3 - have announced payroll reductions, as many companies have slashed headcounts and even closed their doors for good.
In fact, data from Challenger, Gray & Christmas shows 604,514 job cuts were planned at companies through September this year - marking an increase of 198% over the first nine months of 2022. That's the highest number of announced cuts since the pandemic era of January-September 2020 - and prior to COVID-19, it's the highest since the comparable period of 2009.
Amid this uncertain climate, it's more crucial than ever for individuals to be prepared, both financially and mentally, for potential shifts in employment. Understanding the current landscape and taking proactive steps can make all the difference.
Here's a list of crucial steps to take if you've recently found yourself unemployed due to a layoff.
1. Stay Calm, Take a Breath, and Don't Sign Anything.
Being laid off can spark an emotional roller coaster, ranging from anger to sadness to anxiety. No matter how you're feeling, it's important to avoid burning bridges with rash reactions; you might need references or even an opportunity to return to the company in the future.
Additionally, don't let your employer pressure you into signing anything right away. Even during a layoff, you have the right to ask for time to review the terms of your separation.
2. Get Information on Your Severance Package.
Not all companies offer severance, but if yours does, be clear about what it entails. This may include compensation, continuation of certain benefits, or assistance with job placement. Ensure you understand the duration of these benefits, any conditions attached, and the schedule for severance pay. Also, ask about any unused vacation or PTO payout.
Remember, severance packages aren't necessarily set in stone; if you don't feel like the package is adequate considering your time with the company and contributions, you can attempt to negotiate.
3. Request a Letter (or Two) from Human Resources.
Get in touch with your HR department and request a letter explaining that your job was eliminated due to circumstances outside your control. This letter, which is often included as part of your exit package, will be helpful to provide to prospective employers so that you have proof you weren't fired for performance issues.
Additionally, you may want to ask your previous employer for a letter of recommendation or referral. Be sure to review both for errors or omissions, and don't feel bad about asking for revisions.
4. File for Unemployment Benefits.
Unemployment benefits can be a lifeline during job transitions. The process varies by state, but it's vital to start early - benefits might not begin immediately, and can sometimes take as long as a month to process. Familiarize yourself with the requirements, and be diligent in providing necessary documentation or attending mandatory meetings. Remember, these benefits are designed to assist while you're actively seeking new employment.
5. Review Your Finances.
Now's the time to get a clear picture of your financial standing. List all of your monthly expenses and differentiate between essentials (rent, utilities, groceries) and non-essentials (entertainment, dining out). Consider creating a stricter budget to extend your savings, and keep an eye on potential areas for cutting costs, like subscription services you rarely use.
6. Activate Your Network.
Many job opportunities arise from personal connections rather than job boards. Let trusted individuals in your network know that you're looking, but be tactful and avoid bad-mouthing your former employer. Attend industry-specific events, workshops, or seminars. Plus, utilize platforms like LinkedIn (see below) to keep professional contacts informed and to research potential job openings.
7. Revise Your Resume and LinkedIn Profile.
Your resume is your personal marketing tool. Ensure it's up-to-date, highlighting recent accomplishments and skills. Tailor your resume for specific roles or industries you're targeting. Similarly, update your LinkedIn profile, ensuring it aligns with your resume, and showcases endorsements or recommendations.
8. Start Job Hunting.
Dedicate time each day to your job search, treating it almost like a full-time job. Use a multi-pronged approach: online job boards, company career pages, recruitment agencies, and, most importantly, networking. Track your applications and follow up on potential leads. Consider diversifying your search to include part-time, freelance, or remote opportunities, if applicable to your field.
9. Consider Health Insurance Options.
Health insurance is crucial, especially during transitions. If you're in the United States, COBRA might allow you to continue your current insurance for a limited period, but it can be costly. Investigate state-sponsored options or marketplace insurance plans. Compare costs and benefits to find a plan that suits your needs and budget.
10. Avoid Making Rash Financial Decisions.
With uncertainties looming, avoid major financial moves unless absolutely necessary. Now may not be the best time for big purchases, investments, or taking on additional debt. If you have to tap into retirement savings, understand the potential penalties or tax implications.
11. Seek Professional Advice.
Sometimes an external perspective can be invaluable. A career coach can offer strategies and insights into the current job market. Financial advisors can help navigate economic challenges. And if the stress becomes overwhelming, therapists or counselors can provide coping techniques and emotional support.
It's important to remember that layoffs are often due to economic or company-specific issues - they're not a reflection of your worth or ability. While the experience can be unsettling, many people face layoffs at some point in their careers and bounce back. With preparation and resilience, you can navigate this challenge successfully.
On the date of publication, Meredith Margrave did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
