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Being laid off from your job is traumatic on multiple levels. In stressful situations such as this, it can be hard to confidently navigate a path forward and know where best to focus your efforts. Here’s what I’m telling my clients.
Key Takeaways
- Give yourself a minute to be upset. Being laid off can trigger various reactions and emotions, such as anger, sadness, or fear.
- Take stock of what you have. Having a clear sense of available resources can assure you that you can cover your basic expenses for a period of time.
- Review your severance package and all available benefits carefully.
What I’m Telling My Clients
1. Take Inventory
Start by inventorying all your liquid (available) cash in checking/savings, money market funds or CDs, and incoming severance or bonus payouts. Add up your essential monthly expenses like rent/mortgage payment, utilities, and groceries. Then, you can factor in more discretionary spending categories like travel or entertainment. The goal at the outset isn’t necessarily to cut back but to know how much you typically spend.
2. Assess Your Runway
Once you know your monthly burn rate and how much cash you have, you can assess your “runway”—in other words, how many months of current spending you have before you cannot cover daily living expenses.
Note
According to data from Crunchbase, at least 95,667 workers at U.S.-based tech companies have lost their jobs in 2024, a decline compared to the 191,000 layoffs in 2023.
3. File for Unemployment
File for unemployment immediately so you can get the maximum benefit available to you.
If you receive a severance package, review the details carefully to ensure you understand your options regarding equity compensation, portability of benefits, and vacation payout.
Important
If you work in a non-compete or non-solicit clause role, it might be wise to consult with an attorney.
4. Start Your Job Search Early
It’s OK to give yourself a week or two before jumping right in, but don’t wait too long. You don’t want to wait until you need the income and are forced to take the first job offered.
5. Understand Your Benefits
Some of your employer-sponsored benefits may be portable (which means you can keep them after you no longer work there). In particular, you likely can access your medical/dental/vision benefits through COBRA and possibly disability and life insurance. While paying these premiums out of pocket can be intimidating, it’s important not to let critical coverage lapse. You typically have 60 days to decide whether or not you want to keep your medical insurance, and this benefit is retroactive to your termination date.
The Bottom Line
Receiving the proverbial “pink slip” might feel like a worst-case scenario. Thankfully, you can take numerous practical steps to ensure your financial life remains healthy. Tackling one thing at a time and ensuring the most critical components are taken care of first will afford you some breathing room while you consider your next move.
