Laid Off? Now What?
Uh-oh. An unscheduled, vaguely titled meeting invite from HR hits your inbox for first thing in the morning. The rumor mill around the office has been churning in recent weeks, whispers of downsizings, budget cuts, consolidations, restructurings — all polite ways to dress up the inevitable. The company’s headcount is about to get a lot lighter.
Chalk it up to industry slowdowns, global market downturns, loss market share, missed revenue targets, or simple mismanagement, but the reality is for those who receive a pink slip, it doesn’t really matter. A layoff is a layoff, and it sucks.
No one knows this better right now than the more than 16,000 (and climbing) U.S.-based tech workers who’ve been let go since the beginning of the year, a significant and ongoing market correction after two years of unrestrained scaling and growth. From hiring freezes/slowdowns at major players like Meta, Twitter, and Uber, to Red Wedding-style purges at Carvana, Peloton, and Reef Technology, neither established nor younger startups appear to be immune.
For those of us who’ve had the incredibly unpleasant experience of sitting through an offboarding, they’re about as unremarkable as they are impersonal. Rather inauspicious and often scripted ends to otherwise fruitful tenures. While you may feel like screaming, crying, laughing, throwing something at the wall, or nursing your best bottle of scotch (all those emotions are perfectly normal!), it’s important to remember this nudge out the door can be an opportunity.
It can be challenging to notice the silver lining through the tears and countless questions bouncing around in your head, but a layoff can be an unwanted gift to recharge the batteries and refocus your career trajectory. Sometimes we can become too comfortable, stagnant even, in our roles, ignoring obvious red flags such as under market value compensation, dull work, or even toxic management because your team is great or you love the complimentary bagels on Fridays.
Fingers crossed you never find yourself facing down the “it’s not you, it’s us” meeting, but if you do, here are 10 things to remember before the door hits you on the way out:
Confirm Referrals
If you weren’t terminated for cause, you’ll want your previous employer in your corner when hiring managers seek the inside track on whether you’re truly the rockstar you claim to be, or more of a one-hit wonder. Most often this will be your direct supervisor or department head (ideally the person you were closest with), someone who can speak confidently about your character, accomplishments, and work habits. If possible, get their mobile number as well as their email, and be sure to give them a heads up when an application progresses to the stage where an employer might be calling.
Due Pay
Depending on when your last day falls in the pay period, you may be owed a final paycheck or at least a portion of one. Confirm with HR when you can expect to receive that, and whether it’ll be by direct deposit or a check by snail mail. Also, don’t forget to ask about any outstanding reimbursements that are owed, such as mileage and other travel expenses or tuition costs.
If you’re fortunate enough to be offered a severance package, read the agreement carefully. Mind the deadline you have to sign it and consult appropriate legal counsel if you have questions or concerns — especially if you believe the termination was wrong or unlawful. A pretty standard rule of thumb is one, maybe two, week’s pay for every year of service, but it can vary. It’s not uncommon to be reimbursed for any unused PTO/sick days and even receive an extension of health benefits for a set period of time.
Yes, it’s possible to negotiate severance and the benefits therein, but often you get what you get. Be careful of any stipulations or clauses that may impact the agreement if violated, like returning all employer equipment (laptops/other tech, company credit cards, building passes/key fobs), updating your social media accounts, or not posting anything negative or defamatory about the company.
Health Insurance
If you’re lucky, you may receive a grace period of 30 or 60 days for your health benefits as part of your severance package, but after that you’ll have to decide what’s best:
- If your spouse or partner is covered under their employer’s plan, you may be able to be added as a dependent. Even if it isn’t open enrollment, a layoff counts as a qualifying life event that allows you to apply.
- If your company had 20-plus employees the previous year, you may be eligible for COBRA, which is an awesome acronym for the Consolidated Omnibus Budget Reconciliation Act. COBRA allows you to maintain participation in group health benefits for a period of time, usually up to 18 months, but the kicker is you may have to cover the entire premium for coverage up to 102 percent of the plan’s cost.
- Under the Affordable Care Act (ACA), or ‘Obamacare,’ you can shop for an individual care plan where you may qualify for certain subsidies.
Pension/401(k)
If you contributed to a company-sponsored retirement plan, you should have a few different options of what to do with your hard-earned savings. As always, it’s a good idea to speak with a financial advisor or related professional who can guide you in the right direction to maximize your dollars and avoid unnecessary penalties:
- Once you land a new job, if the employer offers a 401(k), see if there’s a way to transfer the lump sum from your old plan to the new one.
- Open an IRA (individual retirement account) and rollover your old 401(k). There are both traditional and Roth options, and again, a financial advisor can recommend the best investment strategy based on your age, retirement date, and risk tolerance.
- Leave it alone. Depending on how much you have in the account, you may be able to keep it invested in your previous employer’s plan.
- Take the cash — yes, it’s an option. No, you shouldn’t do it.
Stocks
If you were savvy enough to negotiate an equity stake upon employment, or were fortunate to have that baked into your contract, be sure to review your original agreement carefully. Most often, you’ll only be entitled to vested options, meaning you’ll lose any options that remain unvested — but not always.
Take a look at this article in Crunchbase that explores all things equity and layoffs, and be sure to do your homework on what type of equity you have, your exercise window (often 90 days), and any tax implications.
Unemployment
Unemployment benefits can be a lifesaver, providing a much-needed supplement to any savings or slush accounts you may need to dip into. Each state sets their own eligibility guidelines and any unemployment claims should be made in the state where you physically worked. According to the U.S. Department of Labor, it usually takes about two or three weeks after a claim has been filed to receive your initial benefits check.
Length of time and weekly benefits amount depend on your eligibility and the state where the claim was filed ( i.e., in California, unemployment insurance provides up to 26 weeks of benefits and can range from $40 to $450/week).
Non-Disclosure
It can be difficult to remember every document you signed during your onboarding months or years prior, but it’s possible you added your John Hancock to a non-compete, NDA, or other confidentiality agreement. When in doubt, ask for a copy from HR so you have a clear understanding of what opportunities may be off limits until those agreements expire.
Stock Your Portfolio
Particularly if you’re in a creative field like marketing, communications, or graphic design, be sure to make copies of content pieces, projects, campaigns, and other materials you’re proud of to build out your professional portfolio. These will likely be key in demonstrating your personal flair, skillset, and experience to potential employers.
Once You’re Gone
Okay, so Elvis has left the building — now what?
Take Stock
This will be different for everyone, but sit down and take stock financially. How much personal runway do you have for the essentials — mortgage/rent, car payments, utilities, food, subscriptions, etc.? Ideally, you’ll have a few months where you can somewhat comfortably target positions that are a stepping stone in your growth and development rather than just jumping at the first opportunity that comes by.
Hit the (Virtual) Pavement
Most of us don’t have the financial luxury to simply put our feet up for a week or two (or more!), but if you can, take some time to recharge, rebalance, and navigate your next steps. Even if it’s just the weekend, think of it as a forced sabbatical. Hit the links, take a road trip, go out with friends — have fun and unwind, whatever that means to you.
When you’re ready to turn your attention back to work, deep dive into what sectors or specific companies interest and intrigue you. Are there gaps in your CV? What skillsets do you want to beef up or explore? Once you have a better understanding of where your compass is pointing, update your resume, canvass your professional network and community boards like Blind and Reddit, and show them why you’re the most coveted free agent on the market.
Visit Hirect’s MELT Board to see where tech talent may be back on the market and companies looking to fill key roles, or download Hirect from the App Store or Google Play.
