By January 5, 2009

Tips on Surviving a Layoff

I have been in the Web business for almost thirteen years. I’ve seen and done a lot in that time, and one of the things you never really get used to are the layoffs. People and companies keep making the same mistakes, and we see the same dot-boom and dot-bombs over and over again. Switching jobs and getting laid off (or doing the laying off) are just as much as .com as JavaScript and XML.

Still, that doesn’t make it the process any easier. With some bitterness and some pride I tell people I work with what it’s like to be on both sides of the axe. You see, my employer is going to let about 1500 employees and contractors go world-wide between about two weeks ago and possibly today. In fact, by the time you read this, I might have been “right-sized” as well.

Here are some tips on how to survive a layoff, just in case you may experience a similar situation in the near future. If you already have a bunch of cash in the bank and low debt, most of these won’t be applicable to you.

Here’s the short version:

  1. Start saving cash.
  2. Reduce any debt payments or 401(k) contributions.
  3. Update your resume.
  4. Backup your work onto a private repository.
  5. Reduce reoccurring monthly expenses.
  6. Don’t panic.
  7. Call your lenders.
  8. Take at least a week off.

This is my main strategy in the face of a job loss: don’t lose your place of residence no matter the cost. If you have to choose between getting evicted/foreclosed and anything else, choose your home. With that in mind ….

  • Start saving cash. Hear rumors? Near the end of your fiscal year? Reduce the amount of money you may put towards debt, and start stockpiling cash. When I was laid off in 2002, I thought I was doing all the right things by reducing my consumer debt to zero. I had purchased a new-construction house about three months before my employer closed. I paid for the appliances, fence, window dressings, and some furniture in cash. I was happy not to have any of that “evil” credit card debt people talked about. That is, until I lost my job and only had two month’s worth of mortgage money in the bank.

    You should have at least three month’s worth of cash in the bank, even if that means charging some stuff to a credit card when you normally wouldn’t. If you don’t have at least a three month buffer, try to save more by reducing your expenses first, and then buying things on credit second. Trust me, you will need cash more than you need a zero balance on your credit card.

  • Reduce any debt payments or 401(k) contributions. If you think you’re going to lose your job (or if you just did), then putting 12% of your paycheck into a 401(k) is not a good idea. Paying your car loan or credit card debt down is normally a good idea, but you need as much cash as necessary. When your rent or mortgage is due, no one cares that you were a good little boy or girl and socked away for your retirement. Make the lowest payments you can, even on credit card bills. You have no idea how long you will be out of work.
  • Update your resume. Go do this. Right now. If you work for a major corporation, or live in an area with a major corporation that is about to layoff a bunch of people, you will have a VERY narrow window to apply for jobs before the market becomes flooded. When Circuit City was in trouble, 2/3rds of our resumes were from their employees trying to leave a sinking ship. Then they declared bankruptcy, and a trickle turned into a deluge. I can’t imagine how much more competitive the job market will get in my city once my employer swings the hatchet. You will be behind the applicant curve if you take a few days to put your resume together after a layoff.
  • Backup your work onto a private repository. This may be illegal or against your company policy, so do this at your own risk. But keep this in mind: the corporation that lets you go doesn’t give a shit about you, and you need to look out for yourself and your family. If you don’t save your work somewhere before a layoff happens it will be too late. Your workstation will be off limits. Prospective employers will be looking for examples of what you did at your last jobs. You will need every edge you can get in this very competitive job market, and having examples may be the difference between you and someone else.
  • Reduce reoccurring monthly expenses. $13 a month for Netflix may not seem like a lot, but if you are in your last month of savings and your unemployment is running out you are going to kick yourself in the junk for not cutting down monthly expenses sooner. Make a balanced decision on things like your cable bill, mobile phone, Internet connection, anything that is a reoccurring expense. That being said ….
  • Don’t panic. Getting laid off is a very emotional experience, even if you’ve been through it many times. You will need some stability in the times ahead, and if it makes you feel better to watch movies or whatever, then maybe spending $13 a month on Netflix is okay. Especially if you trim from other areas, like smoking or going to Starbucks. Unless smoking or going to Starbucks is worth more to you than Netflix, in that case you make your own decision. Know what I mean? Point is, keep a few things that are normal in your life. It’ll help. Don’t freak out and have a yard sale on day one. An ex-co-worker sold his dream car immediately when he got laid off, and then found another job three weeks later. He bought another car just like it in less than a year, to less favorable terms.
  • Call your lenders. When I lost my job in Oregon I went to see my mortgage lender. I had current bank statements and a sheet of paper detailing my monthly expenses. “I have this amount in the bank, and I have to pay this much a month. If I get a job in two months, I can keep making payments on the mortgage, no problem. If I don’t, I might default on my loan. How can you help me?” I figured the bank would rather put me on deferred payments or extend me another loan than wind up with a foreclosed house. I was right, and I walked out with a line of credit that got me through some rough patches. It is better to call your lenders now and give them a head’s up than try to plead your case after missing your payments. Be proactive, before you get calls from collections agencies.
  • Take at least a week off. Send out your resume immediately and contact a recruiter. Let everyone you know that you lost your job; they might be able to help. Make a list of your expenses, and decide which ones you are going to cut sooner than later. Then take some time off. Depending on your finances, take as much time off as you can, but I recommend at least a week. Be accessible, but try to relax as much as possible. The first week during your layoff is the best you’re going to get until you get another job. Enjoy it, because sometimes it’s all downhill from here.

Getting laid off is not the end of the world. You can survive it, even if things seem really scary at the time. I hope you never need this advice, and good luck.

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5 Comments on "Tips on Surviving a Layoff"

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  1. BushPutin says:

    Heh…also…don’t be squeemish about going back and punching the dick who said that there was ‘three years left at this current burn rate’ and just a couple of weeks later says ‘we’re shutting the company down’ in the FACE!

    -BushPutin

    P.S. Well…also don’t be squeemish about jail time….it would have been worth it.

  2. Good stuff Doc 🙂

    Thanks for keeping me on my toes!

  3. Erin Clare says:

    I don’t think even Alon Stivi and HISARDUT could save “the dick” from the assault I would love to bring down on that rat bastard and his crooked ass family. *end rage*

    Digressing, don’t forget to mention to go immediately to sign up for unemployment.

    I’m keeping my fingers crossed for you, Doc. You’re talented and will have no trouble finding work. Razorfish in Chicago and Atlanta need UX people badly!!

  4. drfaulken says:

    Hey there, just wanted to let everyone know there were no layoffs today (that I am aware of). Some contractors were let go early and/or their contracts were not renewed, but the new D-Day is Thursday. Keep your fingers crossed 🙂

  5. Ed says:

    Fingers and toes crossed.