At the time of this writing the economy in the United States is going downhill (again). All economies and companies are subject to what’s known as the business cycle where we ride the good times up until the economy eventually trends back down, which is typically every 8 to 10 years, give or take. We are on our way down now (February 2023) and companies are trying to get ahead of the curve by cutting costs, which also unfortunately also means mass layoffs in the tech industry. In this article I’ll help guide you through how to deal with the world when layoffs are looming.
What is a Layoff
First, not everyone knows what a layoff is or how that’s different from being fired. Most of the time in the United States when you start a job, you start under what is known as “at-will employment”. That pretty much means you can quit any time you like, but also that the company can end your employment whenever they like… sort of. There are laws that protect employees in various situations, but we’ll put those aside for now). If you fail to meet performance criteria or violate some company policy, the company can fire you. What makes layoffs different is that they are usually the result of the company needing to cut back, so in general, a layoff is when your job is eliminated through no fault of your own.
Additionally, when someone is fired, they are cut loose immediately. Often when you are laid off, you may keep your benefits and/or receive severance pay in which you will keep being paid for some amount of time determined by the amount of time you’ve worked at the company.
When Times are Good (How to Prepare)
When we aren’t headed into a recession, it is the perfect time to get everything in order both personally and professionally. Most sources recommend saving 6 months of expenses and putting it somewhere that is easy to access. Build up those savings when times are good. These are the times when you should invest in yourself where it is possible to increase your earning potential by say, going back to school or paying for training for the next stage in your career. A strong economy is also the time to make a career change and take risks. Maybe you’ve always wanted to try working at a startup, or maybe you want to make a shift from developer to program manager. When times are good, companies are trying to expand which often means there are hiring binges, which means more open positions and companies being willing to take more risk.
When Things Look Dicey
As hard as the economy can be to predict, if you pay attention the signs that things are going to slow down will become apparent. As the economy slows it’s time to settle down. Make sure you are firm in your position and if you are risk –averse, start to make yourself indispensable. How much risk you are willing to take will really depend on your personality. It’s also a good idea to look at the company you work for. Is it the type of company that will cut employees at a moment’s notice just to keep investors happy, or is it the type of company that will hold out for employees and do everything it can to prevent layoffs? Is it the type of company that has a lot of padding in its earnings to be able to weather a storm, or is it barely turning a profit which might force the company’s hand if things turn sour? Knowing these things can help you better understand the position you are in and the amount of risk you want to take.
Dealing with Layoff Anxiety
Of course, no matter what you do at any company there are risks of layoffs. Sometimes there isn’t anything you can do about it, which is one of the worst parts about layoffs. Even before layoffs happen, people feel them coming and it can create anxiety that is incredibly harmful to the workforce. Due to constraints from HR and Legal teams, oftentimes leaders can’t say anything about how or when layoffs might happen, and they often communicate in ways that leave you without any real information. This is where you need to be kind to yourself, do the best you can to prepare, have a plan, and don’t just stick your head in the sand. Once you have a plan, do the best work you can, and if you still get laid off, forgive yourself, give yourself time to grieve, and then move forward.
If Someone You Know Gets Laid Off
Maybe you are not the one who got laid off, but someone else you know did. Maybe it was a co-worker or a friend. It can be really depressing watching the stream of posts on LinkedIn and other social networking sites about people being laid off. The first and most important thing is to be emphatic. Understand that person is probably dealing with mixed emotions depending on their situation. It can be shocking, embarrassing, and terrifying all at the same time, and often people don’t have much time to process the situation. If you are close enough to the person, it can be a good idea to reach out and send a message of support. Do not to send a hollow message of “hey you’ll be fine chin up”. They never make anyone feel better. Instead, acknowledge the difficult time the person is going through while offering support. For example, “Hey, I know this must be hard, I can’t imagine what you must be feeling but if you need it, I am here for support”. Sometimes support can be making yourself available to listen, get ice cream together (my favorite pick me up) or helping to review their resume. The first message ignores the reality of what is going on (see toxic positivity). The second shows empathy and offers support.
If You Get Laid Off
If you get laid off, the first thing you should do is breathe. Give yourself as much time as possible to process what just happened. Take time to feel angry and grieve the sudden loss you experience (a career can be an incredibly important part of one’s identity). It can be easy to panic and get swallowed by the anger you are likely to feel but be kind to yourself and give yourself some time. Hopefully you have some savings you can rely on to give you the time you need to recover.
The second is to understand the terms of your layoff. Do you keep your benefits for some period? Do you get severance pay? There are some cases where you get severance pay, but if you find another job before a certain date, you must pay it back. It is important to understand the terms of your layoff and read all the fine print so you can plan accordingly.
Next find sources of support. That could be talking to someone (friends, family, psychologist) or reaching out to your professional network both to find new opportunities but also to find support from someone who may have been through this before. It can be helpful to understand that often in these situations (especially during mass layoffs) you are not alone.
Return to Work
You’ve given yourself time, and now you are ready to get back to the job hunt. What is the next step?. The first is to look around and take stock of what is going on in the job market. Are the layoffs focused on tech companies (as they are at the time of this writing), or are they broader across software engineering jobs? I once heard someone say “tech company layoffs are not tech layoffs” meaning even if the big software companies like Microsoft Amazon and Google are laying off, that doesn’t mean that non-tech industries like retail, medical, and finance are laying off their software engineers. Job hunting in a bad economy doesn’t change the fundamentals of finding a job (more on that in another post) but it does mean there is more competition. You may find yourself needing to make sacrifices, so begin by reviewing your non-negotiables. Some questions you might ask yourself include:
- Are you willing to move?
- Do you need to maintain the same salary, or can you cut back?
- Do you care what your specialization is? (For example, front end vs. back end) Can you pivot yourself to a more in demand role?
- Do you care what industry you are in?
- Do you care about the size of the company?
Knowing the answers to these questions can help you narrow your search.
The last thing I will add is that you shouldn’t take the first job that comes to you unless you absolutely have to. It can be tempting to rush into a new job, but you could be setting yourself up for failure in the long term. Use your savings and severance to give yourself time to find a job you can succeed at, at least until the economy starts to recover.
Economies rise and fall so always be prepared and if it does happen to you, remember to be kind to yourself for as they say, this too shall pass.
