Getting Laid Off
This year started off with a bang as I was laid off from my job on January 3rd. Fortunately, I did survive that layoff and I live to tell this story.
That particular day started off like any other, but the normalcy would be short lived. I was coming off 2 weeks of holiday vacation, so I logged into my company laptop at 6am which was a bit earlier than usual. I wanted to get a nice jump on the day and catch up on any emails before hitting the ground running.
Curiously, my laptop booted up as expected and then quickly shut back down for updates and an auto restart. This was a red flag, and I took notice.
After booting back in, I immediately went to my inbox and saw an email for the company’s Chief Operating Officer and knew bad news was likely around the corner. I opened the email – and sure enough, there was the announcement.
As it turned out, my company planned to lay off 10% of its workforce which amounted to about 8,000 employees. The email didn’t specifically say who would be included in that group, but it did say that those impacted could be expecting another email sometime in the coming hours.
After reading through the initial email, I went back to my inbox to find what should have been a major surprise.
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Surviving Layoffs
Hundreds of thousands of people have been impacted by layoffs across many industries over the last few years. Unfortunately, the news of getting let go likely came as a heavy blow for many.
It’s been nearly five months since being let go, and all things considered, I’ve done well navigating my way forward. I’ll share my layoff experience in this post and will dive into the layoff survival lessons that I have learned in the process.
1) Surviving Layoffs Means Remembering That The Good Times Don't Last Forever
There is an old children’s fable called the Ant & The Grasshopper. In the story, the Grasshopper spends the summer making music and living it up. At the same time, there is a group of Ants who diligently prepare for the coming winter by stowing food and building shelter.
Predictably, winter comes and the Ants are comfortable in their shelter. Meanwhile, the Grasshopper struggles with no place to turn and ultimately perishes in the intense cold.
This is just a child’s tale, but there are some wise principles to be gleaned from it. Chiefly, this story drives home the point that the good times never last forever. Winter is always around the corner and we should use the good times to prepare for the bad.
Those who recognize this principle in real life will have the best chances of surviving layoffs. Fortunately, I was one of those people.
2) Survive Layoffs By Paying Attention To The Signs That Layoffs Could Come
Generally speaking, my goal is to be like the Ant and prepare for winter because I know that no good time lasts forever.
Beyond this basic understanding, I also noticed some glaring signs over the last few years that led me to believe that layoffs could be coming. Giving credence to these signs and properly preparing helped me survive the layoff. Here are the things that I noticed.
I Asked to Be Fired
Fired, laid off, terminated – they are all essentially same thing since you employer is removing you from your job. That said, the most obvious sign that I could be laid off was the fact that I asked for it. My request took place several months before I was actually laid off – but I believe it helped make the decision easier for the powers that be.
Layoffs Taking Place In My Industry
I noticed a string of layoffs taking place in my industry in the months before my own firing. In actuality, I noted several rounds of layoffs at other companies in the preceding 14 – 16 months. I took note of these as the first potential dominos.
Irrational Market Exuberance
Another thing that I noticed over the last several years was a general increase in financial market interest amongst the general public. Realistically, I began seeing this trend start with cryptocurrencies in 2018. I knew things were getting a bit crazy with financial markets when I had chronically unemployed people talking to me about the best cryptocurrencies to invest in.
Several years later, investing contagion had spread and suddenly everyone was a market pro. New crypto coins were created out of thin air, real estate began to boom, NFTs became a craze, meme stocks gained credibility, and Reddit’s Wall Street Bets made front page news.
Irrational exuberance is unfounded market optimism that lacks a real foundation of fundamental valuation, but instead rests on psychological factors.
At the end of irrational exuberance is a market correction as asset prices begin to come back down to valuations. While this is happening, companies begin shedding excess weight to ensure they can weather the storm.
Rapidly Appreciating Assets Values
It’s hard to say what comes first, but we know that there is a correlation between market optimism (or exuberance) and asset valuations. Perhaps they work in a circular fashion with one fueling the other and so on. Nevertheless, as public interest in markets began peaking in recent years – so did asset prices.
In fact, 2021 would see 70 all time highs in the the S&P 500 with a peak in December that year. One month later there would be another all time high ending in January 2022.
At the same time, the real estate market boomed as it hit record prices in both 2021 and 2022. In percentage terms, real estate also appreciated at a record high rate in the same period.
While many clamored to get in on the action, I saw this as an unsustainable situation that would ultimately come to an end.
Talks of Inflation and Interest Rate Hikes
Chatter outside of mainstream financial networks began ridiculing the government for excessive debt and money printing in 2020. As the pandemic raged on, local economies shut down and the government accelerated the money printer to fund economic stimulus. As a result, a cohort of economist and financial experts thought that the government overshot their target and put the economy in a precarious situation.
Although it looks like the warnings were correct, it took the government much longer to openly admit that the economy was on shaky ground and that the inflation was a real thing.
By the time the FED really acknowledged inflation was real, the game as afoot. Many layoffs were already etched in stone although they wouldn’t occur until a year later.
For awareness, words like inflation and interest rate hikes are bad for business and usually signal trouble. I knew this and really started preparing.
Frenzied Hiring In My Industry
Executives in my industry now point to rapid expansion as the top reason for laying off nearly 300K employees in 2022 and 2023.
One thing that I saw within my own company that made me think things could be heading in the wrong direction was that managers seemed to be rapidly padding the size of their teams.
I thought that this behavior was motivated by another form of exuberance where everyone was in a race to the top. Afterall, one way for a manager to shine would be to lead larger and larger teams.
Rapid hiring combined with widespread promotions must be bolstered by rapid hiring to fill out the ranks.
3) Surviving Layoffs Requires Planning
The signals of possible layoffs were certainly there. And fortunately, I saw them and internalized them as potential threats to my employment. As a result, I began planning for winter like the Ants in the children’s story.
The two primary things I did to prepare for a potential layoff was establish a six month emergency fund and optimize my finances. These are vital steps for surviving layoffs and they are even helping me have my best financial year to date.
An Emergency Fund Helps You Survive Layoffs
Your first line of defense for surviving layoffs is having funds set aside for a rainy day. There really is no such thing as job security in many industries, so having this contingency in place puts you in a much stronger financial position.
Of the hundreds of thousands of employees laid off over the last 2 years, many were likely unprepared for the sudden loss of income. And to survive, they would have had to turn to credit cards, pillage investment accounts, or take the first job to offer out of desperation.
An emergency fund shields you from these choices for a longer period of time since you can dip into your saved up cash to keep things moving in the right direction while you search for your next opportunity.
This produces a much more peaceful state when things start to unravel. It also makes you a more confident candidate when you interview for your next role.
Optimized Finances Mitigates The Impact of A Layoff
The healthier your finances, the better your chances of surviving layoffs. It’s easy to get caught up thinking that the good times will last forever – but they never do. Instead, it would be prudent to use the good times to proactively optimize your finances. Afterall, being reactionary is never a great approach.
Here are the steps I took to optimize my finances to ensure I could survive being laid off.
Creating A Budget
I knew I needed to optimize my day-to-day finances to ensure that I was both nimble and resilient. With that goal in mind, the first thing I did was establish a solid cash budget.
Having this budget was powerful because it gave me an instantaneous view into my financial picture that would allow me to quickly make adjustments if things got tough. Again, this bolstered my feelings of peace because I knew that I had control over my finances without guesswork.
Slashing Expenses
After getting control of my money via a budget, I turned my attention to reducing my monthly expenses. Chiefly, I wanted to reduce my rent because this was the largest line item in my budget and the landlord was increasing rent by 20% from $1400 to $1700.
Miraculously, I was able to find a better unit after spending a few days looking around. Even sweeter, the new unit was only $1200 which was actually 14% less than my original rent amount. Sure, my new place was smaller and older – but it was in one of the best neighborhoods in town. It also had a lot more charm to it.
With housing taken care of, the only thing remaining for me to do was to control expenses by not adding anything else to my plate. This meant that I couldn’t join a fancy yoga gym that would have cost $120/month.
4) Surviving Layoffs Is About Sacrifice
Being laid off is a game of survival. Therefore, it is wise to make a few sacrifices to ensure that you and your family can continue to thrive.
The last thing you want to do is to make large financial commitments when things are shaky at work, or when a recession is looming. Home upgrades, car purchases, and vacations should be put on hold.
Instead, it is better to secure your position and wait things out until times are more promising and the storm has passed. Surviving layoffs is all about self preservation, and you can’t do this if you are backed into a corner.
The yoga class mentioned earlier? Not booking that class was a sacrifice to ensure my layoff survival.
5) What to Do When You Get Laid Off
Surviving layoffs is about more than just finances. Personally, I noticed the signs and prepared for the worst. Then, the worst actually happened. I was laid off for the first time in my life and had to navigate things as they came.
All things considered, my layoff went about as well as it could have gone. That said, there were a few surprises that were in my blind spots. Let’s discuss these and my general process next.
Open Yourself Up To Many Different Emotions
The first thing to expect when being laid off is a rush of emotions. For me, news of the lay-off came as a positive. I felt relieved and optimistic.
As I mentioned, I had requested a lay-off months prior. Therefore, the layoff was good news since it gave me what I asked for. It also include a generous lump sum severance.
By and large, my positive spirit would persist – but I did experience about two weeks of emotional lulls that started around week 7.
I wouldn’t say depressed, and not even sad. I would describe it as more of a malaise from being unplugged without anything to really fill the void left from not working. Miraculously, this feeling completely dissipated as soon as I accepted a suitable job offer.
It’s important to prepare the challenging emotions involved with being laid off before it actually happens. This will help you cope if negative emotions crop up. Your chances of surviving the layoff will be much higher if your head is in a good place.
I had a lot of reasons to be happy about the layoff and still eventually struggled. Therefore, it would be prudent for those who love their jobs to mentally prepare in the event an unwelcome firing happens because your emotions could be hit even harder.
Take Time To Figure Out What's Next After Your Layoff
No matter how you slice it, a layoff is a time of new beginnings and you must figure out what to do next.
I was suddenly jobless and at a proverbial crossroads. I had to decide where I would take my life next. Some of my options were to stay in my current industry/role, make a career change, start my own business, or take some time off.
My initial reaction was to take 3-6 months off, but time was becoming my enemy so I chose to get back to work. I decided to stay in my current role/industry while also exploring a future career change.
You Should Plan For What's Next Before Being Laid Off
Through this experience, I’ve learned that it’s best to have contingency plan in place before a layoff happens.
You may decide that you may go for a new career path or try to start a business. Whatever it may be, it’s best to have at least a vague plan so you can quickly reroute yourself instead of wasting time. Even a plan of taking a few months off to vacation and travel would work. It’s just best to have this thought out a bit beforehand.
Use Your Layoff As An Opportunity To Really Enjoy Life
This is where I have a bit of regret. Because I didn’t have a plan for how I would use my time, I sort of spined my wheels early on. I pivoted away from taking time off to rapidly applying for jobs. I did ultimately find a job and went back to work in a relatively short amount of time.
The one thing I failed to do was to be intentional about taking some time off for myself to simply enjoy life.
If I could go back, I would at least plan a trip to the West coast which I have been talking about for years. I should have even taken some trips to the beach since February weather was reasonable in Florida.
My advice to you is to take advantage of the time you have to really savor life. We spend so much of our time working and earning money that we forget to actually live it up a little. Sit down right now and think about at least one thing you would do if you suddenly found yourself with a significant amount of free time.
6) Surviving Layoffs Could Mean Maximizing Your Earnings
After surviving the initial shock of the layoff, one solid strategy is to focus on maximizing your earnings.
You can do this by leveraging the fact that you were given a severance package to leave your company gracefully. As such, you should take advantage of this generous gift by keeping your foot on the gas and seeking to jump back in to work as quickly as possible.
If executed properly, you should be able to easily make a multiple of your previous salary since you will stack your severance with the income from your new job.
I did just this.
As it currently stands, I have already made 75 – 80% of my previous salary in just the first 5 months of the year. At this pace, I’m tracking to earn 1.75 – 2x my most recent salary by year end. In all, this strategy will make this my best financial year to date and help me catch up to where I should be financial by age 35.
Who ever said that surviving layoffs has to be some self loathing pity party? We can write our own rules and choose to seize the moment.
7) Remember That Money Isn't Everything
With such high earnings, one would think that I’m feeling better about my life. Ironically, I’m not.
To clarify, I feel generally great about my life – but this has nothing to do with money. I feel great about my life because feeling good is my baseline. Sure, I have my share of bad days as well. But I’m usually pretty happy at my base.
That said, significantly boosting my income hasn’t really made me feel any better than I normally do. This is proving to me that money isn’t everything and it can’t buy happiness. I’m just the same person I have always been and I remember vividly where I come from. Maybe it’s my background that keeps me grounded and humble .
I’m happy that money isn’t changing me. Afterall, I could do what a lot of other six figure earners do and start strutting about like I’m rich or something.
And speaking of remembering where I come from.
8) Knowing Your Bottom Helps You Survive Layoffs
One of the greatest gifts about growing up poor is that you know just how far down the proverbial ladder you can go if you really need to. If necessity dictates, I believe I can survive is some pretty tough conditions for as long as I need to climb my way back out. Granted, it may not be ideal – but I know I can do it.
This is empowering because it suddenly makes surviving layoffs look like child’s play. Privilege is a wonderful thing.
You may not come from quite the background that I do, but I’m sure you have you own story. Remembering just how far you’ve come is a great tool to help you cope and survive a layoff. You’ll find comfort knowing that you have been there before and can do it all again if necessary.
For those who haven’t faced any challenges in life – not to worry. Look at your layoff as your first of many calluses along life’s journey. And then go back to lesson #1 and remember that the good times don’t last forever.
9) Survive Layoffs By Understanding Your Company Doesn't Care About You
Recognizing reality is a great strategy for surviving layoffs.
As such – no matter how much they signal to the contrary, your company doesn’t care about you. This may be an unwelcome reality, but it’s valuable to internalize if you want to be in the best position to survive a layoff.
One easy way to conceptualize this idea is by thinking about what happens to underperforming employees? Short answer is they are eventually let go / fired because they don’t bring enough value to the company.
In that, you see the transactional nature of employment. Workers are paid to show up and deliver value. Companies are then expected to compensate employees for those deliverables.
Rinse and repeat.
It also helps to remember that your “company” is really just a collection of people who all have their own self interest to look after first. Unfortunately, your wellness falls as a lower priority to their own survival and whatever other selfish motives they may have.
Sure, caring for all employees sounds good as a recruiting slogan. But, it never quite holds up once stress tested. The people who run the company will always do what’s best for the company in the long run. Including lay people off.
10) There Is A Difference Between Work Friends And Real Friends
One thing layoffs will reveal to you is that very few of your work friends are your actual real life friends. Therefore, you will lose most of your work friends when your time at the company comes to an end. I suppose it’s similar to going through grade school or college where we lose friends as we transition from school to school or between grades.
This is an important thing to keep in mind for surviving layoffs because it will help bolster your emotions in the event you are rejected.
I had a number of people reach out to me with what seemed like a lot of empathy for my situation. Interestingly, upon hearing that I was happy and doing well, their empathy quickly turned into something else that I can’t quite pinpoint. It felt like I was suddenly getting the treatment one would give to the overtalkative neighbor.
In other words, they quickly lost interest in speaking and I haven’t heard from most of them since. Here’s a real text message from a former colleague whom I thought was a decent friend. I mean, who reaches out but doesn’t want the other person to write back? Odd.
What Are Your Tips For Surviving Layoffs?
Were you, or someone you know impacted by layoffs in recent years? If so, congratulations because you’ve already survived as evidenced by the fact that you’re reading this!
These are just my personal notes about surviving layoffs, but I’d still love to hear from the audience.
What are your top lessons and what would you add to this list. I’m excited to hear your feedback in the comments!