How To Prepare For A Potential Job Layoff

Wow. It seems like every day, there is more news about one company or another laying off several workers.

Layoffs stink. They really stink. I know because I’ve been laid off three times over my career.

What also stinks is worrying that you may be laid off and not knowing for certain. Especially if you haven’t done what you can to make sure you’re prepared in case a layoff happens to you.

(I am not a financial expert. All information is based on my own personal experience and research. This information is not meant to be financial advice and is just for educational purposes. This post includes some affiliate links. If you click an affiliate link and make a purchase, I may receive a small commission.)

There are some things you can do financially and even career-wise to make sure you take care of yourself and your family after you’re laid off, and also find a new job as quickly as possible.

Pay off debt

If you have a lot of debt or even some debt when you get laid off, it can put some extra stress on the situation. The less money you owe someone else, the more money you have for yourself, and that’s even more important when you have no steady income coming in.

Related read: 7 Tips For Paying Off Your Debt Quicker

Stock up on cash

Everyone should have an emergency fund to help pay for unexpected expenses. They can also be helpful if you get laid off. I had several months saved up both times I was laid off. Thankfully, I was able to live off my emergency fund both times without depleting it.

Admittedly, I had more savings the second and third times I was laid off than I did the first time. This was because I’d been laid off before and decided to stock up a little extra cash in case it happened again.

If you know for certain you’ll be laid off or there’s a really, really good chance you could stock up as much cash as you can without keeping from paying bills and paying down debt.

Create a budget

Having a budget already in place that you’re following is helpful because
You can see how much extra income you can allocate to your cash stockpile.
You’ll be able to quickly see how much you need to pay your important bills - food, housing, utilities, and necessities.
You can easily figure out how much you can cut from your budget if you get laid off

Both times I was laid off, I had a budget that I followed to the tee. A few days after my layoffs, I sat down with my budget and went through what were necessities vs. nice to haves and to see what I could eliminate or cut back on.

If you don't already have a budget created, you can check out my posts How To Create A Monthly Budget For Your Household to see how to get started with a budget and 6 Great Apps For Managing Your Budget for budgeting tool options.

Research company policies

Most companies, especially mid to large companies, have policies around layoffs. If you think a layoff could happen to you, find your company's employee handbook and see what it says about policies and procedures around being laid off.

Some things to look for are

• The benefits you'll lose on your layoff date
• Find out what happens to your unused paid time off (PTO). Some companies will give you a payout for unused PTO. Some won’t like companies that offer unlimited PTO. Review your company's policies and procedures for layoffs to know what to expect and what you're entitled to.
• The type of severance you can expect. How much could it be? When is it paid out? Sadly, employers aren’t legally required to pay severance, so knowing what you can or cannot expect in this area can help you figure out how soon you may need to dip into the cash you’ve stocked up.

Use your benefits

Typically, when you get laid off, your benefits end that same day. I’m talking about your health benefits, 401(k) matches, and any other benefits your company may provide.

If you think a layoff could happen in the future, not the near future, take advantage of these benefits now by scheduling your yearly check-ups with your primary doctor, dentist, and eye doctor. Try and get the appointments scheduled so they happen before you think the layoff could happen, so you can attend as many as possible, if not all of them. You'll want to make sure you're within your health insurance limits for the number of check-ups it will cover in a calendar year.

If your company has a 401(k) match and you haven’t started taking advantage of it, see if you can fit that into your budget while stocking up cash. You may want to skip this, though, if you still have consumer debt you’re paying down. The reason is that it gives you more of your paycheck to pay towards the debt.

Update your resume

After you get laid off, you’re going to start looking for a new job. You’ll need a resume for that. Having your resume up-to-date and ready to send out can take off a lot of the stress.

It did for me after my second layoff. Even after I got that job, I made sure to keep my resume updated with what I was doing in that position. So when I was laid off, I didn’t have to scramble or stress to get my resume ready. I was literally able to go home and immediately start sending my resume out to companies I was interested in working with.

Related read: What I Did To Financially Survive Three Layoffs

Update your LinkedIn profile

Just like a resume, having an updated LinkedIn profile can help you find a new position if you get laid off. Having it updated and ready to go can take some of the stress off for applying to new jobs.

If you’re a little skittish about updating your profile due to concern that your boss or co-workers may see the updates, you can save the updates in a Google or Word doc, and if you get laid off, you can quickly copy and paste from the Google/Word doc into your LinkedIn profile.

Some things to include in these LinkedIn updates are highlighting your most recent accomplishments and skills, and asking for recommendations from former coworkers, supervisors, or clients.

Build/strengthen your professional network

Networking is a crucial part of finding a new job, and it's important to start building your network before you need it. Ways to do this are

• Attend local and/or national industry events and conferences
• Join professional organizations
• Connect with current and past co-workers on LinkedIn

Building relationships with people who work and recruit at the companies you would be interested in applying to can help you uncover job opportunities and get your foot in the door should you need to find a new job.

You can also put out feelers to your network for new potential opportunities. Check with your network to see if they know of any companies or positions they think you could be a good fit for. See if they can help connect you with people at those companies. You may end up finding a new job before a layoff happens. If you don’t, at least you’ve built up some new connections that can be helpful if a layoff does happen.