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Many companies have announced layoffs in recent weeks, and others have hinted that cuts may be coming. Luckily, there are steps workers can take to prepare.
“At the end of day, you can’t control what’s happening in the economy, but you can control building a strong professional resilience,” according to Mandi Woodruff-Santos, a career and money coach.
Best Buy, Ford Motor, HBO Max, Peloton, Shopify, Re/Max, Walmart and Wayfair are among the firms that announced layoffs in recent weeks.
Meanwhile, 50% of firms are anticipating a reduction in overall headcount, while 52% foresee instituting a hiring freeze and 44% rescinding job offers, according to a PwC survey of 722 U.S. executives fielded in early August.
These are executives’ expectations for the next six months to a year, and therefore may evolve, according to Bhushan Sethi, co-head of PwC’s global people and organization group.
“They’re focusing on what they can control,” Sethi said of employers. “They’re dealing with geopolitics, supply-chain issues, inflation, war in Ukraine, all these factors for which they have to determine what their strategies are.”
Despite those negative indicators, other data suggest the labor market remains strong.
Employers added 528,000 payrolls in July, beating expectations and marking a full recovery of lost jobs during the Covid-19 pandemic. The layoff rate hovered near record lows in June while job openings remained historically elevated.
About 250,000 people filed an initial claim for unemployment benefits during the week ended Aug. 13 — an increase relative to the spring but only up slightly from prepandemic levels.
“The labor markets are still incredibly strong, from all the data we’ve seen,” Sethi said.
Here are some tips to prepare for a potential layoff.
Workers should first take stock of their specific situation, rather than extrapolate based on negative headlines. Your industry may be well-insulated from layoffs, at least for the time being, which means worry might be misplaced, experts said.
Woodruff-Santos recommends thinking instead about your “personal professional economy,” including your job and skills. For example, what do employment and job openings look like in your industry? What are you seeing and hearing from the people in your industry?
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“People should forget about what’s happening in Silicon Valley if they don’t work in that space,” she said. “If you’re a project manager in the education or health care space, that’s an entirely different ballgame.”
It remains a worker’s market in many areas of the economy, especially for specialized talent in fields such as cybersecurity and digital, automation, supply chains, and mergers and acquisitions, for example, Sethi said.
It’s always prudent to have an emergency fund, but that financial buffer will be especially important after a layoff.
That money will help bridge an income gap during periods of unemployment. Many workers don’t get severance pay or may only receive a few weeks of income. Workers won’t necessarily qualify for unemployment benefits, depending on their state, employment and recent earnings history.
“A lot of people today don’t have three months of a cash reserve,” according to Ted Jenkin, a certified financial planner and CEO of oXYGen Financial, based in Atlanta. “If you get fired it’s not necessarily true you’ll get a severance package.”
Workers should also examine their expenses, which will determine how long their emergency fund lasts, he added. They should include student loans in these calculations — payments are scheduled to resume after Aug. 31, though the deadline may be extended, Jenkin said.
Further, it’s a good time for workers to schedule any necessary health appointments while on their existing insurance plan, especially as many people may have met their deductible for the year, Jenkin said.
Those with a 401(k) plan loan might also consider trying to expedite repayment. Laid-off individuals may incur tax penalties for failing to repay that loan within a certain time frame (typically 90 days) after losing a job.
Workers can also focus on boosting their “professional resiliency” ahead of a potential layoff, Woodruff-Santos said.
Many people focus on dusting off a resume during times of career transition; but that’s not necessarily the key to finding another job, especially for those in more advanced stages of their careers, she said. Personal branding and personal relationships become more essential.
At the end of day, you can’t control what’s happening in the economy, but you can control building a strong professional resilience.
Individuals can attend or participate in panels at industry conferences, attend workshops, and post or share industry-related content on social media sites like LinkedIn — all in service of engaging with their career network, Woodruff-Santos said.
Workers who complete a team project can consider doing a “shoutout” on social media touting the work and tagging the team members involved, for example, she added.
Excelling in the workplace and being a good colleague can help in the long term, especially if former colleagues remember your work and can help recruit you to another firm.
“You can’t underestimate the value of those connections you’re making in your current workplace,” Woodruff-Santos said.
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