One month into 2023 and major tech companies have already laid off tens of thousands of workers.
This week, Spotify joined Meta, Salesforce, and Amazon, in the growing list of businesses to drastically cull headcount.
“I take full accountability for the moves that got us here today,” Spotify’s CEO Daniel Ek confessed while announcing that 6% of the company was being laid-off.
Just one week prior, 10,000 workers at Microsoft and 12,000 workers at Google were suddenly told that their services would no longer be needed.
As news of job cuts keep rolling, it’s enough to make any worker fearful for the future at their (probably comparably smaller) firm.
And the feeling’s not entirely irrational.
In the tech sector alone, more than 150,000 jobs were culled in 2022. That trend is expected to continue this year, as employers confront inflation.
Half of U.S. executives told PWC that they are planning to reduce headcount, meanwhile, in Britain 1 in 5 employers are likely to make staff cuts over the next year.
Plus, mentions of 'layoffs' and 'being made redundant' have doubled in employee reviews on Glassdoor in the last few months.
But don’t panic.
The scale of layoffs happening in Silicon Valley — generally, tech businesses saw a boom while everyone was working remotely during the pandemic and over-invested — might not play out across other industries.
Plus, with the layoffs acting as a warning to the wider workforce, there is plenty of time to financially, emotionally, and professionally prepare for such a scenario.
How to prepare for a potential layoff
For many people, their job represents more than just a salary; Work can be a lifeline and form part of their identity, especially as they move further in their careers. So it can easy to forget the basic principle that we work to live — not the other way around.
“The number one way to prepare for a potential layoff is to save for an emergency fund. An emergency fund is a cash account to be used for this scenario of your income stopping,” says Sophia Lerche-Thomsen, a financial planner at Frizzell Wealth Management.
She recommends saving a minimum of three times your combined monthly expenses, so that should you lose your job you have three months of bills, mortgage, and other expenses (I’m looking at you, Netflix), covered.
“However, it is prudent financial planning to keep around six months if possible,” Lerche-Thomsen adds.
While you’re getting your finances in order, she also recommends assessing whether private insurance could be beneficial to you.
“It is so important to make sure your finances are protected in the form of insurance should anything happen to you — particularly if you are the main breadwinner and your family relies on your income to pay the mortgage for example."
She always recommends her clients take out private insurance "to protect them against a scenario like being laid off which would result in their workplace insurance stopping and being left vulnerable."
Prepare yourself, practically, for potential turmoil
“A tip for anyone fearing redundancy is to prepare themselves for job hunting,” advises Jill Cotton, career trends expert at Glassdoor.
Practically this means dusting off your contacts book (or logging back into your LinkedIn account) and re-engaging with your professional networks, updating your CV and thinking about the logical next steps in your career.
“Having application materials ready to go can put you in a great position to find a new job quickly,” says Cotton while adding that “being prepared will stop the emotions of the situation from clouding your ability to successfully apply for roles.”
Being super clear in advance on what your redundancy package is will also help you emotionally prepare for what the worst-case scenario looks like. “The shock factor will be lessened slightly by knowing roughly what the payout will be,” Cotton adds.
It’s also a good idea to create a support group to lean on. Or as Andy Brown, CEO of the leadership consultancy Engage, calls it, a “personal board”.
“Try to create a small network group who you can use as a sounding board,” he suggests while adding that it can be made up of anyone from a former boss to a sibling.
Ask yourself: Whose views do you trust most? Who would support you emotionally and personally through what can feel like a very tough time? Who will give you honest opinions, while also showing care?
Make your contributions known
It’s often said that the best way to keep yourself safe from redundancies is to make yourself a “go-to” person—that is, the expert in your field, someone with so much knowledge in their sector that they’re practically irreplaceable.
“Redundancies rarely come out of the blue; there is invariably a gloomy tension where employees know that some people will have to be axed,” says Catherine A. Baudino, executive coach and author.
If you’re reading this and realizing that you’re not bringing anything unique to the table — or you are, but your boss doesn’t know — now is your chance to make your contributions known.
“This is the time when you have to step back to step forward,” Baudino says, adding: “Prepare your message to differentiate yourself from your peers”.
Sarah Burrows, career and business coach at Achieving Ambition suggests tangibly determining how much value you bring into the business if you can.
Once you have this figure at your fingertips, don’t keep it to yourself. “Communicating this effectively and objectively is imperative. You will be a resource they require to continue operations,” she adds.
A more long-term approach to protecting yourself from a layoff is by upskilling.
After many years of honing your craft, it can be easy to think you've mastered your area of expertise and don’t need to learn anymore. But Ruth Kudzi, founder of Optimus coaching Academy disagrees. "Professionally I think we can support ourselves from redundancy by always developing our skills,” she says.
To see how you compare against the competition, “consider how you will make yourself attractive to other employers and look at job adverts for positions at your level or more senior to help you,” she adds.
Having up-to-date skills will not only make you stand out internally but also externally while sowing the seeds for your next job.
Start sowing the seeds now
Like many career cushioners on TikTok, you can line up a plan B even if you might never lose your current role.
LinkedIn career expert Charlotte Davies says that workers are increasingly “taking actions to cushion themselves, for whatever comes next in the economy and job market.”
This can look like anything from learning a new transferable skill, to networking, to actually interviewing for new jobs, as an insurance policy.
And the best part is that career cushioning won’t impact your current role or involve any awkward conversations with your line manager. If anything, it’ll make you more confident about your future prospects.
An easy place to start is by updating your profile on LinkedIn (or any other professional network). Davies says that having relevant skills and keywords in your profile “can further boost your visibility in recruiter searches.”
Career coach Dr. Kyle Elliott suggests "carving out time monthly or quarterly" to keep these up to date.
"This is important because you don’t want to waste valuable time updating your outdated career documents if you’re impacted by a layoff," he says.
He also says that now is a good time to start striking up conversations with your connections — or messaging them on LinkedIn.
"It’s much easier to reach out to your network for support following a redundancy if you’re been in regular contact than if you haven’t talked in years," he adds.
Likewise, while you’re still in contact with your current manager (and hopefully have a good relationship), there's no time like the present to line up testimonials.
Remember: Your 9-5 isn’t the be-all and end-all
As much as work is important and central to many people’s identity, it’s important to be multifaceted and have hobbies, side hustles, and joy outside of work.
For those whose work is their be-all and end-all, being let go can be earth-shattering.
“One way to protect yourself from the impact of being made redundant is to have multiple things in your life that are of importance to you,” echoes Burrows.
She suggests picking up a hobby or joining a social group. “This is so that your career holds less weight in your life. Then if it is no longer, you aren’t left with such a gap to fill,” she adds.
Really when it comes to layoffs, as the saying goes: it’s not personal, it’s business. By building an identity outside of your work, you can detach yourself from the emotional toll of being let go.
“Knowing that you've got the resources inside you to cope with whatever happens in the future and building that self-belief in your own abilities can help you deal with redundancy more effectively,” Kudzi says.
"If you realize that the only thing you can control is how you show up and do the role then you can build your resilience," she adds.
