Getting Laid Off

So you got laid off, now what?

Getting laid off is almost as much a part of life as waking up these days. So if you have not gotten laid off you either will or you are probably grossly underpaid for what you are capable of doing. In any case it is best to be prepared for a layoff at some point in your life - I have an article on how to prepare here. Coming back to the current situation - you were laid off - now what?

Non Financial impact 

We will delve into the practical aspects of the situation very shortly but lets spend a little time on the human aspects of the situation. Being laid off is traumatic - specially the first time it happens to you. You have lost a livelihood, irrespective of if you loved your job or not, the positive cash flow the income that made your life possible has been interrupted, negatively impacted, gone away. That is a rude shock to the system. We will explore the financial aspects and what to do and how to deal with this situation in great depth later on, for now know that whatever the situation there is away to recover from it. It might not be ideal, it might not be even pleasant but every situation has a way out.

Lets delve a little into the emotional aspects of being laid off. There is the rejection aspect of the situation, someone had to make a choice on who stays and who goes and they chose to - let YOU go. Yeah I know - you probably did NOT WANT to go anywhere! So that stings. Specially if you have spent a long time at a company and considered it a "home", "yours" identified with it in a big way.

Know this, companies are legal constructs created by people to allow a collective to generate profit. Its that simple, it is not a person, it is not even a building for sure it has no memory of you. When it said we take care of our people, our people are everything to us - there was no IT or WE so it did not mean anything.

A collection of people in most cases made the decision that impacted you. Someone very senior looked at a ledger and realized the income was not matching the outflow or the profits were not enough and they decided that costs had to be contained, the order flowed down stream to another manager to trim X% of costs - at this point - this is a decision that impacts your life - you are represented by a percentage - no name, just a percentage. This percentage might or might not be converted to a dollar figure but it flows down stream till it hits a line manager - someone that knows your name and has a rough idea of what you do - this person or collection of people then have to decide who they can keep and who they have to lose to hit that target set by the no name, no face 'senior manager'. This decision process can be very enlightened where the choices are made based on company need or productivity of the individuals being considered or it could just be people being people and picking the people they like or are related to. You have no visibility into this process - it is nothing that you really could impact - except if you married/had sex with/ did ridiculous favors for any or all of these people. Seriously? How much of a sellout do you really want to or need to be?

Anyway it is too late now.  A bunch of people made a bunch of decisions and justified it in a bunch of ways and it impacted you. It sucks. What are you going to do now? How will you react to this situation? How will you come out the other side? This is what matters and this is what people will remember you for.

More Non Financial Issues 

Those with low self esteem should skip this paragraph. Really there is no way around this - this decision may actually be a reflection on you and your abilities, but most likely it is not. If you have some doubts about your abilities, this is really not the time to deal with them. This is not a time to create more emotions that will get you down. When all is well again, and you are on top of the world, come back to this time and think if you were performing at the best of your abilities, if you were really capable of doing the job that you were asked to do. THIS IS NOT THE TIME. For now bury this thought and do not look back.

Lets assume you ability to do the job was not the reason for your termination. Because remember we can still fire people in this country for incompetence. There is no workers council in the United States of America. You were laid off not fired. You are currently at the end point in a chain of events. The butt of a nasty joke. How you handle this situation defines you more than anything else leading up to this situation.

Then there is the whole "What will people think?" or social standing issue. Are you someone who is defined by external things like titles, the car you drive, the nice clothes you wear? If you are - well you are that is all there is to that. Acknowledge this - be comfortable with this. If you do not like to be this way try to work on not being like this - be who you want to be apologize to no one. If you do care then yes this is a set back and you will feel bad about yourself. But remember that not everyone in the rest of the world is like this - a lot of people could care less about what your title was and probably have no idea that you have/had a fancy car - they might remember the color of your car if at all. This problem for the most part resides in your mind. I wager your true friends and family will not care two hoots if you are a Managing Director or a peon. Yes there are some people who might not treat you the same way anymore - you have to decide if these people are important to your life or not or if the way you were treated because of your job was really that important to you. If they are, just do not hang out with them till you get back in a position of admiration, or make them not so important either way this is something that you control.

How could they do this to me? Well who is they? They are a bunch of people that you work with. These are not your family (hopefully - it would be pretty sad if your family laid you off - and I really can offer no solace), and even if you thought they were your friend, really they never were. Friends are people you like and want to hang out with when you are not getting paid to do so. People at work are acquaintances, the decision on if they are friends depends on if you really like to hang out with them outside of work and if you continue to hang out with them now that you no longer work with them. These are at best potential friends. Basically someone who once thought you were the best thing since sliced bread decided they could make do without you. Doesn't sound as bad now does it?

I am sorry if you were one of those people who put their "heart and soul" into their jobs. At the end of the day a job is an exchange of your time and skill for their money. Money is something you use to get the things that you want and need. So a job is something you do to be able to do and have the things you want and need. Be clear about this exchange as you move forward. If you happen to enjoy your job - well that is a nice bonus and you are one of the lucky ones.

Figure out what the terms of your termination are 

Are you required to be on gardening leave? Gardening leave is a period of time during which you are prohibited from accepting other employment. The prohibition could be based on a contract that you signed when you started working for the company that laid you off. During this period you are still paid by this company. When does this period start? When does it end? What are the conditions/restrictions under which you have to operate during this period? What is considered a violation? What is the cost of violating this period? Do you get benefits during this period?

The penalties for violating your gardening leave could be the loss of a pension, severance package, loss of deferred compensation or even a lawsuit from your previous employer. It is very important to understand what you are allowed to and not allowed to do. In general you are allowed to seek new employment but are not allowed to accept nor begin new employment during this period.

Did you get a severance package? Are you entitled to one? Review your employment contract if you signed one - if you do not have a copy ask the company to give you one. How much money are you supposed to get? Do the math - did you get the correct amount? Call them up and ask them how the number was calculated. Under what terms? Ie: are you required to do or not do something to be able to collect on these monies? Understand clearly any behaviors or situations that would either preclude you from collecting these monies or would require you to pay back any of these monies. Do you get benefits during your severance period?

List out: Start date, End date, notes on what you are allowed to and not allowed to do during this period.

To Sue or Not to Sue 

I am not a labor lawyer, you should consult one and hire a good one if you are going to sue or you think you might have a case. If you think you have been terminated in a manner that is a violation of labor laws in the state that you live in, then it is worth exploring this option. Keep in mind that you might forfeit any severance package the company may have offered you if you opt for this path. Ageism, Sexism, Racism and all other forms of discrimination is alive and well in the world, question here is have you been victimized by it and are you willing to and is it worth your while or are you motivated enough to go through the laborious and painful litigation process.

This is not a decision that needs to be driven on a financial basis alone, however it is a decision that needs to be made in a very cool, calm way weighing the pro's and cons and the impact that this will have on your life now and in the future.

What is your financial situation? 

You need to know the following things: How much money do you need to run your household every month - keep the utilities on, pay rent/mortgage, minimum on debts. No Starbucks coffee money in this budget. You need to know how much money you have in your savings. You need to know how much money you can get your hands on - by selling things - including investments, things you own including your home if you are willing to do this or have to do this. Make this assessment very realistic.

You now know exactly how much severance money you have coming in and you know how much you have in savings. Now divide this with your basic monthly budget - how many months can you support your life? If you can go 6 to 12 months you are in very good shape. If you are in the 2 to 6 month range you are doing ok but you need to make finding a job a top priority and reduce all unnecessary expenses - and your definition of necessary needs to be very narrowly define. If you have less than 2 months of money then in addition to cutting out any and all expenses you can you also need to find some form of temporary employment while you are looking for more permanent employment - consider all jobs even ones that you would never consider in normal times.

In addition as a contingency plan it would not be a bad idea to make a list of those who you might be able to borrow money from and possibly be able to move in with. I understand the situation is not that dire but this is about preparation.

Next Steps 

Apply for unemployment benefits. You need to do this as soon as possible. Irrespective of if you qualify for unemployment benefits it is important to file. In most states your benefit begins from the day you file and not from the day you were unemployed. In addition to payments from the government you will also qualify for educational and training programs as well as be invited to participate in job fairs and other activities geared towards getting you back to work. Some of this activity will require you to go to your local unemployment office and be forewarned that this is not a fun experience - however it is a necessary one and you can and will do this.

Figure out what you will do for health care. If you have a severance package or are covered by your previous employers plan figure out how long this coverage is for. If you are not then find out if you are eligible to receive COBRA (Consolidated Omnibus Budget Reconciliation Act). Please keep in mind that COBRA coverage will cost you extra you need to figure out how much and add that to your budget worked out in the previous section.

The job hunting process is detailed in my article on that topic and is linked here.

Final Word 

Please share your own experiences. As you go through this process, and remember you will get through it, It is important to know that and believe it, try to help other folks that are in a similar situation. When you get where you are going continue to help people, in the final analysis that is the only work that is worth doing.

"Life's most persistent and urgent question is, 'What are you doing for others?' - Martin Luther King