Key takeaways

  1. Many people go through this - there’s no shame
  2. What may seem uncertain or scary may be an excellent opportunity
  3. Know your rights and don’t be rushed into decisions
  4. Take care of the basics first, such as cash flow and healthcare
  5. Use every resource you have to land your next position

"I'm sorry to have to tell you this, but we have to let you go." 

Even when you know it's coming, getting laid off can be a shock. You may feel angry, scared, blindsided, or even rejected. Maybe you never saw it coming. It can feel personal even if you're part of a large company, such as those in the tech industry currently experiencing a wave of layoffs, slashing employee salaries to reduce costs.

However, no matter how dire your situation may feel, remember this: you're not powerless. The most important thing to do first is to stay calm and remember that you have options.

10 things to do if you get laid off

Here are 10 helpful tips for laid off employees.

1. Don't panic: breathe

Recognize that you've just had a shock to your system. You're not the first person this has happened to, and you won't be the last. It's easy to fall into the mindset of, "Oh, no, what do I do now?" But this isn't something you have to solve in 15 minutes.

Even if you've been blindsided in a meeting, you can excuse yourself to take a break and collect yourself. One thing you can do to calm yourself is to pause and take several slow, deep breaths. It may seem cliché, but it is a good way to calm your nerves. Tell yourself you'll be okay (because you will).

Once you've collected yourself, there are a few things to take care of next. The rest can wait.

2. Check your documents

Before exploring any city, state, or federal protections you may have, review internal company documents that spell out your rights as an employee.

These include:

  • Employment agreement or contract
  • Employee manual
  • Union agreements or regulations

Email yourself copies of these documents (if possible). Also, keep any emails or other documents that amend any of those agreements.

3. Don't sign hastily

Your (now) former employer may pressure you to sign a severance agreement immediately, implying that receiving your financial paycheck, accrued vacation time, or other perks is contingent on your signature.

It isn't. A severance agreement is a legal document that may be negotiable or reviewable by your attorney. Most state laws require your employer to allow their employees time to review that agreement.

Federal law doesn't require your employer to hand over your final paycheck immediately, but you must generally be paid no later than the next payday. Some states also have additional requirements. For example, suppose your contract or employee manual offers other unemployment benefits, such as payment for accrued vacation time, or severance pay. In that case, that pay can't be withheld because you haven't signed a severance agreement.

4. Negotiate if you can

It may be difficult in the heat of the moment, but if your company is open to negotiating the layoff terms, think about what you want. That may include:

  • Additional pay 
  • Extra months of healthcare coverage
  • Letter of recommendation (useful in some industries, but not all) or referral
  • Career counseling or job search support
  • Stock options

If you weren't fired for cause but laid off or furloughed, you may want to request a letter specifying why you're being terminated.

5. Know the laws and your rights

Some states may require severance or a notice period when employees are being laid off or furloughed. This may vary by the size of your organization. California, for example, requires employers to provide a 60-day written notice a before mass layoff. To find the rules in your state, check your state's Department of Labor website.

If you suspect you're being laid off due to discrimination because of your age, gender, religion, or other legally protected class, consider consulting an employment attorney along with your state's Department of Labor. Keep in mind that some states have additional protected classes besides those listed in federal law.

6. File for unemployment

If you're receiving severance pay, which may delay your unemployment compensation, file as soon as possible. Processing your unemployment benefits may take a while. However, there's no shame in filing for unemployment insurance; you and your employer have been paying for it (directly or indirectly) for this very reason.

When applying for unemployment benefits, you must:

  • Have earned enough wages during the base period.
  • Be totally or partially unemployed.
  • Be unemployed through no fault of your own.
  • Be physically able to work.
  • Be available for work.
  • Be ready and willing to accept work immediately.

7. Arrange for healthcare

Unless you have other coverage (e.g., through a spouse or domestic partner) or your employer agrees to pay your health insurance premiums, you'll generally have two options for healthcare coverage:

  1. Continue on your employer's healthcare plan with COBRA. The Consolidated Omnibus Budget Reconciliation Act, or COBRA, allows you to remain on your employer's health care plan for 18 months. Chances are both your premiums and deductibles will increase, possibly significantly, because your employer will almost certainly cease paying a portion of your premiums.
  2. Sign up for Obamacare (Affordable Care Act). Obamacare may be a better option, especially if your state has a robust healthcare marketplace. State-by-state guidance is free and available from the federal government. However, there are time limits, so don't delay this process.

8. Review your finances

This is the time to look at your current expenses and sources of income. Are there any expenses you can reduce or eliminate temporarily? Do you have a side hustle or part-time job that can be expanded? Can friends, relatives, or community or religious organizations provide financial or emotional support?

9. Get your job search together

Although it may or may not seem like one, this may be an opportunity to rethink your career. Are you ready to try something new? Do you have transferable skills that you can use in another job or industry? If so, you might want to consider more than just a new job.

If you're unsure or need extra help, an employment consultant, recruiter, or trusted friend can serve as a valuable resource. 

Keep in mind that recruiters and consultants are professionals in the business of helping future employers and prospective employees connect. They aren't therapists. The place to talk out your feelings about being laid off is with your friends or a mental health professional.

10. Maximize your resources

Use every tool at your disposal to land your next job. Even if you graduated years ago, consider tapping your college/university/alumni associations and job boards. And, of course, network, network, network. There's no shame in telling people you're available. Professional organizations and societies can also be excellent sources of job leads and critical industry information. If you'd prefer to stay in the same industry, research industry and networking events and make connections.

If it's helpful, stay in touch with your co-workers as well. If anyone understands what you're going through, it's them. They may also have ideas and resources that can help.

Again, always remember that no matter why you've been laid off, you're in control of the next step in your career. Whether that means finding a similar position or going after something new, the power is in your hands.

To help you navigate all of the decisions to consider if you get laid off, talk to a CFP® Professional at Facet today.