Worst case scenario? You’re happily employed, enjoying your work, and suddenly it happens – your company announces layoffs. It’s a gut-wrenching experience, not just for those directly affected but also for those who remain employed.
Unfortunately, layoffs have become increasingly common with the bear market in full swing and a possible recession looming. Not only that, but layoffs often come in waves. Once a company has experienced layoffs, they are more likely to happen again. In fact, research shows that layoffs beget more layoffs.
So why do layoffs occur? There are a few reasons.
First, a company often uses layoffs to improve its financial performance in the short term. They might take this action to please shareholders or make the company more attractive to potential buyers. However, this strategy is often unsustainable in the long term and can actually lead to further financial decline.
Secondly, layoffs can create a negative feedback loop within the company. As employees are laid off, morale decreases, and productivity decreases. This can then lead to more layoffs to further improve financial performance.
Finally, once a company has laid off employees, it becomes easier to do so again in the future. There is less social stigma attached to layoffs, and the company has already established the necessary processes and infrastructure.
If you’re employed at a company that has recently experienced layoffs, it’s important to be aware of the risks. Try to stay positive and productive, and be prepared for the possibility that you may be laid off in the future.
If you’ve survived your company’s first round of layoffs, congratulations! Remember:
1. Don’t ignore your feelings.
It’s natural to feel a range of emotions after surviving a layoff, from relief and guilt to anxiety about the future. Acknowledge how you’re feeling and give yourself time to process.
2. Don’t forget about your laid-off co-workers.
They’re going through a tough time. Check-in with them and see how they’re doing.
3. Don’t neglect your finances.
The layoff may have shaken up your financial situation even if you’ve kept your job. Review your budget and make sure you’re prepared for any unexpected expenses. Hello, emergency fund!
But there are some things you can do to prepare for the possibility of being laid off.
First, take a close look at your career plans. If you’re in a stable industry with good job prospects, you may not need to worry too much about being laid off. However, it’s important to have a Plan B in place if you’re in a volatile industry or one with limited job prospects.
Think about what you would do if you lost your job. Would you be able to find another job quickly?
Are you continuing to network, improve your professional skills and qualifications, and plan your career?
Would you be able to survive on your savings for a while? What other sources of income do you have?
It’s also important to take a close look at your company. Are they experiencing financial difficulties? Just because you survived one round of layoffs doesn’t mean you’ll make it through another. Remember, your chances of being laid off increase when your company has already undergone layoffs.
Here’s how you can prepare financially if you’re worried about being laid off.
First, make sure you have an emergency fund in place. This should be enough to cover your expenses for at least three months, though the average time between jobs has crept up to nine months.
Second, make sure you’re not over-leveraged. This means having too much debt relative to your income. You’ll still need to make your debt payments if you’re laid off, so you need to be able to afford them.
Third, consider taking out a life insurance policy to ensure your family is taken care of financially if you’re no longer around.
Finally, if the worst happens, keep in mind that being laid off doesn’t have to be the end of the world. It can be a chance to reassess your career and life. Perhaps you can make some changes for the better. You’ll be better positioned to weather the storm if you’re prepared financially.
Related Reads:
20 Easy Ways to Start Networking
The Importance of Networking During a Recession
10 Exercises to Alleviate Financial Anxiety
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