What to Do if You Get Laid Off: An Employee’s Guide - Shegerian Law

As the world economy recovers from the effects of the COVID-19 pandemic, companies are taking the necessary measures to ensure business continuity. These efforts include cutting costs and downsizing. In worst-case scenarios, businesses may resort to layoffs.

A layoff is very different from being fired. An employee is fired due to their actions or behavior. In contrast, an employee is laid off because of decisions made by the employer.

You can think of it like throwing cargo to save a sinking ship–a necessary but unwanted band-aid solution to keep a business afloat. If your company is laying off employees, this guide provides actionable advice before and after being let go.

Why Do Companies Lay Off Employees?

In light of an economic recession, employers may lay off employees due to a decline in demand, seasonal closure, or financial difficulty. While it’s less likely, another common reason is company restructuring following a buyout. Read more about these reasons below.

1.   Declining demand for products or services

The most straightforward reason for a layoff is that a company can no longer afford the employees’ salary. If a company is failing to grow or the demand for its goods or services is down, it may not need as many employees to remain functional, leading to layoffs.

2.   Seasonal closure

Some companies operate during specific seasons and don’t need their entire staff outside those periods. For example, a company that makes holiday-centric products is only in full production in the months leading up to and immediately after the season.

3.   Economic downturn or global turmoil

The most recent example is the turmoil caused by the pandemic. Not only did many industries struggle, but they also had to contend with transitioning to online or remote operations.

An example is the restaurant industry. Many restaurants could not sustain themselves without dine-in patrons, and even those that could transition to delivery-only probably had to lay off their service staff.

4.   Company restructuring following a buyout

If a company is acquired by or is merging with another, the new owners may have a different idea about its structure or organization. These changes can lead to company audits that may find certain positions redundant or no longer necessary, resulting in layoffs.

A great recent example is Elon Musk’s purchase of Twitter and the massive wave of layoffs that occurred shortly after due to company restructuring.

How to Prepare for a Layoff

If you suspect an incoming layoff, there are a few things you should do to gear up for it.

1.   Maintain professionalism at work

It might be tempting to vent your frustrations at work. After all, losing your job is an extremely stressful ordeal. However, it’s best not to burn bridges. Your colleagues and bosses can help you find your next job and provide professional references when you start your job hunt. On top of this, if you remain in the same industry, you may work with them again.  

Suppose you maintain your professionalism and continue to add value to your company. In that case, the layoff you’re expecting may never come. Even if it does, you at least still have your professional contacts to help you out.

2.   Take note of legally-mandated and company-provided benefits

Review your company’s policies concerning being laid off. The employee handbook usually includes terms for severance payments, convertible vacation or sick leaves, the status of benefits such as health insurance, and how they apply to layoffs.

Severance laws vary per state, so determine the ones pertinent to your company’s location. Knowing these things beforehand helps you plan ahead if the layoff does happen and spot things your employer may have missed or other mistakes in your severance package.

3.   Update your resume and search for new employment opportunities

It’s time to dust off your resume and make sure all your information is up to date. Don’t forget to include any training or relevant experiences you received under your current company. Start putting out your feelers in the job market to see if anything catches your interest. Having options can relieve a lot of the anxiety you might feel from the expected layoff.

4. Establish and inform your support systems

Let your family and close friends know that you’re expecting a layoff. Your support systems can help you manage losing job security. They can also help you in your job-search efforts and potentially provide financial assistance should you need it. Having a sound support system can carry you through the most challenging parts of unemployment.

5. Analyze your financial situation and prepare accordingly

You may not be able to afford your current lifestyle if you lose your salary. If you sense a layoff coming, you need to start saving and cut expenses as soon as possible. Even with all your preparations, you can’t be sure how long you’ll remain unemployed, so having a healthy amount of savings is vital.

What to Do If You Get Laid Off

The dreaded letter arrives on your desk—you’ve been laid off. Here are some things you can do to ensure your stability and well-being.

1.   Set aside some time for reflection

While losing your job can be scary, it can also be freeing. You can switch professional fields if you want, so don’t think you’re stuck looking for a job like the one you just lost. If you’ve been working in one industry for a long time, there may be new types of jobs that weren’t available when you first started looking that you can try out.

You can also use this opportunity to advance your skills. The extra free time can be put toward certification courses or other kinds of training if you want to become an expert in your field or switch to a different one.

Losing your job is a significant change and choosing your next one is an even bigger decision, so take some time to reflect on what you might want in your next career.

2.   Review your current financial standing

With the loss of income, you must create a budget for yourself and your family. You probably need to make some lifestyle changes to remain secure until you find a new job. Consider how much money is in your savings and how long you can stretch it until you need a new source of income.

You also need to consider if you have any outstanding debts because you need to contact your creditors and inform them of the situation. While monthly payments were manageable when you had a salary, they can begin to stack up now that you’re without an income.

When you have a good idea of your financial situation, you can take informed actions with the knowledge of how secure you are and for how long.

3.   Register your unemployment

You need to register your unemployment as soon as possible to avoid any waiting period, which can vary per state. You may not need severance payments ASAP, but if you ever do, it’s better to have it readily available than go through lines and red tape. Ultimately, preparation will be key for this challenging transition.

4.   Check if you have everything you’re owed

This step is vital to ensuring you are prepared to leave your job. You must ensure that everything owed to you, whether by law or company policy, is given and that you get a complete severance package.

As previously stated, things like any pending paychecks, remaining health insurance premiums, convertible paid leaves, and retirement plans are all things your company owes you for your work with them. It will be a huge waste if you forget about claiming them or aren’t sure how to.

Consider hiring an employment lawyer to help you through the nitty-gritty of your company policies and local laws to ensure a fair and complete severance package. Employment lawyers are experts and can guide you through the process of getting everything you’re owed.

Don’t Let Yourself Be Swept Away

To continue the sinking ship analogy from the introduction, you shouldn’t let yourself be swept away if you’re ever laid off. The bright side is that you now know why companies lay off employees and what to do both before and during a layoff.

If you have more questions or concerns about being let go, get a free consultation from Shegerian & Associates today!

Disclaimer: None of the aforementioned information should be construed as legal advice. Likewise, contacting us via our website does not constitute an attorney-client relationship. Please consult with a competent and qualified attorney to discuss your specific situation before taking action on your own.


Manuela Varela

Relations Manager

Manuela Varela has been with Shegerian & Associates since August 2022. She is responsible for outreach and marketing on behalf of the firm and manages relationships between firms and referring attorneys. She is also responsible for developing business opportunities and affiliations. Manuela graduated from Loyola Marymount University with a degree in Economics and Political Science.