What To Do When You Get Laid Off

Getting laid off is never fun. As someone who has experienced this three times, it can be disorienting. Your self-esteem may take a hit when your employer decides it’s time to part ways.

[highlight]There are 20 things you should do after you get laid off. You'll need to know what to ask your employer for, how to take care of yourself, how to assess your finances, and how to search for your next job.[/highlight]

Once you have these things mastered, you'll feel in control again and ready to take on the job market.

Table of Contents

What Is A Layoff?
What To Ask Your Employer For When You Get Laid Off
Take Care Of Yourself
Assess Your Financial Situation
Start Your Job Search
How Can You Stop Being Laid Off
Final Thoughts

What Is A Layoff?

Here is what a layoff is: it’s a sign that the company you worked for made poor projections in terms of revenue or compensation expenses.

Here is what a layoff is not: a reflection of your worth as a person or as an employee. Companies lay off personnel to reduce expenses and liability or if they are changing direction.

This differs from being fired. If you lost your job because of misconduct, it was due to something you did, not because of something the company did.

What To Ask Your Employer For When You Get Laid Off

When your employer tells you that you've been laid off, it's important to know what steps are next. You may or may not be caught off guard by the news. Either way, knowing these steps will make it easier to get the right documents and the right information even while you're processing the job loss.

1. Get A Layoff Letter

A layoff letter is given by an employer to an employee. The goal is to provide the employee with information about the termination. It includes why it happened, when to expect final pay, and what happens to your benefits going forward.

It should also include contact information for the person in the company that you should get in touch with if you have questions after the layoff is complete.

2. Get Details On Your Final Paycheck

If your paycheck is direct deposited into your bank account, make sure you have the date that the last check should be deposited. If you receive an actual check each pay period, make sure you know the date that you can pick that up or that it will be mailed to you.

Contact the person listed on your layoff letter immediately if you do not receive your final payment to address the situation and get it resolved.

3. Ask About Health Insurance

If you receive your health insurance through your job, you may be eligible for COBRA. Short for the Consolidated Omnibus Budget Reconciliation Act, it extends the benefits of employees for up to 36 months after a layoff. The employee pays for the continued health benefits, which often includes an additional administrative fee on top of the cost of the insurance.

Because each laid-off employee's benefits can be different, it's important that you have your specifics detailed in the layoff letter. That way you'll know how long you're eligible for benefits, the cost per month, and how to sign up to receive them.

4. Inquire About A Severance Package

Ask your employer about whether or not you have a severance package and what's in it if you do. If you have a few moments, read your employee handbook, which should detail the specifics of severance if your company offers it. Per the U.S. Department of Labor's guidelines on receiving severance, whether you receive it or not and how much you receive usually depends on how long you have worked at your place of employment.

Get all of the details of your severance package in writing in your layoff letter. Having those specifics will help you to remember what your agreement was and even help you hold your employer accountable to the agreement if that becomes necessary.

Take Care Of Yourself

Your first inclination after you get laid off is likely not caring for yourself. However, self-care is vitally important after a layoff. A job loss is most definitely a loss, and you need to make sure you're doing okay in the aftermath of that loss.

5. Take Time To Grieve

According to this BBC article about the psychology of job loss, psychologists put the grief that follows losing a job on par with the grief that follows the loss of a loved one. That's a major loss, and every person will process it differently and for different lengths of time. Allow yourself to feel all the emotions that come along with a job loss. Even if you didn't particularly love your job, it can still be hard to lose it.

The key is not to stay stuck in this state of mind all day every day. Take some time to grieve every day and do that for as many days as you need to, but also take time every day to practice gratitude for what you do have. You can also take small steps towards finding a new job while you're still grieving your old one.

6. Change Your Mindset

As we mentioned, grieving is natural. In order to help you move past that when it's time, work to change your perspective on the job loss. Are you seeing it as an opportunity or a setback?

If you choose to see it as an opportunity, you'll be ready to search for new and exciting things. Did you take the layoff personally or can you see it for what it was: a business transaction? If you see it as a business transaction and not a personal attack, you'll be able to move on easier and quicker.

7. Talk To People

It can be helpful to talk to a few trusted friends or family members as you process your new reality.

They can listen as you process your loss and might be able to help suggest some things to do to feel better. If you truly feel like you're sinking into clinical depression because of your job loss, don't hesitate to seek out professional help. A counselor can help you work through your feelings as you navigate your world after a job loss.

Assess Your Financial Situation

8. Register For Unemployment

Each state runs its own unemployment program. Your eligibility, the amount you receive, and how long you receive it depends on several factors that each state sets in place. In order to see if you're eligible to receive unemployment and how much, check with your state. Click here for a good overview of how to figure out the amount you might receive on unemployment, and then click here to register for unemployment with your own state.

9. Review Your Budget

If you haven't made a budget yet, now's the time to make one. If you have a budget, now's the time to review and reassess. What areas can you trim a little bit? What things can you cut out altogether? Are there things you need to add in that weren't there before, like your COBRA health care payments? Keep things tight because you don't know how long you will be unemployed.

Related: How To Make Your First Budget

10. Review Your 401(k)

If you had a 401(k) with your company, generally speaking, you will have four choices of what to do with that money after you're laid off.

Leave it alone and don't touch it.
Leave it alone until you get a new job and then consolidate it with what your new employer offers.
Open up a Rollover IRA and move the money into that.
Cash it out.

We don't recommend the last option, but it's a choice and we want you to have all of the information.

Your best option is probably to open a Rollover IRA with a discount brokerage such as Vanguard or Fidelity. Doing this will give you the most investment options and will have the lowest fees.

11. Assess Your Credit Cards

We know that it might seem like a weird time to check your credit cards, but trust on this one--it's not. If you don't have an emergency fund set up yet, you might have to charge some things in the near future that you weren't planning to charge.

If so, you'll want to make sure that you're using a card with a low-interest rate and one that gives you the most amount of rewards possible.

12. Check Your Bank Statement For Unnecessary Fees

Check your bank statements or go online and look at your account information. Make sure you check carefully as it's possible they only charge fees if you don't deposit a certain amount or maintain a minimum balance. If your bank is charging you fees, switch banks.

Listen: Avoid Bank Fees At All Cost

13. Take A Temp Job

As anyone who has been in the FI community for a while knows, having an emergency fund is a critical piece of achieving FI. However, if you've just started working towards Financial Independence, you may not have had time to establish that emergency fund. If you've reviewed your budget, have little to no emergency fund, and can't make your ends meet, consider taking a temporary job that will quickly bring in money.

Here is a list of jobs that are frequently hiring no matter what's happening with the economy.

14. Start A Side Hustle

Starting a side hustle during your layoff is a great way to spend any downtime you have while you're unemployed. One of the staples of achieving FI is establishing a side hustle. Start now! Use this time to establish yourself and build up inventory (if necessary). If you need a web presence, set it up. Reach out to contacts you have who might benefit from whatever goods or services you might be offering.

Having an extra stream of money will be beneficial even after you land a new job. And who knows? Maybe your side hustle will take off and become a full-time job someday!

Start Your Job Search

15. Envision What You Would Really Like To Be Doing

Use this time of unemployment to your advantage and consider what you want to do with your life. If you loved your previous job, keep searching in that field. Use your contacts and see what might be available in your field. While you're searching, brush up on any certifications you might need. You could also take online continuing education credits to bolster your resume.

However, a layoff is a great time to think about what you really want to do if the job you were just laid off from wasn't your dream job. Maybe you want to stay in the same field but become a consultant or a teacher. Maybe you want to start your own business. You might want to switch careers entirely and decide to go back to school to learn something new. If you do want to make a switch, start researching now to figure out how to get started in a new career.

Listen: The Courage To Find Your Dream Job (Again) With Kerry Ann Rockquemore

16. Update Your Resume And Cover Letter

Make sure you have an up-to-date resume and target it towards the job that you want. If you haven't looked at yours in years, you might want to start a new resume from scratch. Here are some tips on how to write the best resume.

You'll also need a cover letter. It's important that you have a good framework down but then tailor it to fit the job for which you're applying. This way you know it will be free of mistakes and ready to go very soon after you see a job for which you want to apply. Check out this site for tips on how to write a good cover letter.

Updating your social media is important for two reasons. First, research shows that employers are looking at prospective employees' social media accounts. Do you have anything that might be embarrassing on your pages that you wouldn't want a potential employer to see? If so, here's why it's important to clean them up and how to do it.

The second reason to update your social media is that sites like LinkedIn are basically online resumes. Employers have the ability to find you through your page. They can reach out to you directly if your experience meets their needs. Having your profiles on LinkedIn and Facebook updated could help you land work. Don't forget to post a resume to sites like Indeed or Monster.com.

18. Make Business Cards

Since we just got done mentioning social media, the idea of a physical business card might sound archaic--but hear us out. Your business card is a marketing tool. It's something that you can easily have in a purse or a pocket at all times. You can pull out it to give to someone on a moment's notice. It's easier to distribute than a resume. If you meet someone in a social setting that might have a job lead, you just hand them your card.

Having a business card also says that you're serious, both about your career and about your search for the new job. List all of your contact information on there. Don't forget your social media profiles and even a link to your blog or website if you have one. All of your information in one easy-to-distribute card.

19. Prepare For Interviews

Failing to prepare for a job interview is like returning a kick in football, making it all the way down the field, and then stopping on the five-yard line and allowing yourself to be tackled. Take 30-45 minutes and follow these tips to prepare for your interview. It will give you the best possible shot at actually landing the job.

20. Spread The Word About Looking For A Job

Don't hide that you got laid off. Instead, spread the word. Tell your friends and family. Post something on Twitter or Facebook and tell your contacts that you're looking for a job. Tell your LinkedIn contacts. You never know who might be the connection between you and a potential new job.

How Can You Stop Being Laid Off

Nothing is a guarantee when it comes to protecting you from being laid off. However, there are steps that you can take before layoffs happen. These may potentially help you avoid being cut when and if they do.

Be Flexible. Establish yourself as someone who is willing to take on additional responsibilities and learn new facets of your job and others' jobs. This flexibility and willingness to learn may set you apart from other employees and could add job security.
Have A Strong Work Ethic. While you don't always have to be the first one in or the last one out of your company each day, you should have a strong work ethic that's clear to your employers. Be dependable and consistent. Meet all of your deadlines and treat others with respect. If you say you'll do something, do it.
Make Sure Your Employers Know Your Value And Your Company Contributions. While you definitely want to be known as a team player, your employers should also know what work you yourself have done. Give credit where credit is due, but make sure they know when you should get the credit too. If they know all of your accomplishments on behalf of the company, it might give you a leg up during layoffs.
Offer To Take A Temporary Salary Reduction Or Work Reduced Hours. If the layoffs in your company are sweeping, no amount of proving yourself might make you immune. However, those things in combination with an offer by you to work reduced hours or take a temporary reduction in salary might just be enough to save your job. It signals to your employer that you're seriously committed to the company for the longterm and may "up" your value enough to help you stay employed.

Final Thoughts

Being prepared before it happens is ideal, but even if your layoff takes you by surprise, know this: A layoff is not the end of the world. You can and will get through this. Take a deep breath. Follow the steps we've provided here. Have confidence in yourself and your abilities. And remember that this is just a season of your life.

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What To Do When You Get Laid Off

What Is A Layoff?