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How to Prepare for a Possible Layoff

How to Prepare for a Possible Layoff

This week I found myself thinking through how to prepare for a possible layoff. Many of my friends and colleagues have been impacted this past year so I know I’m not immune. What is my plan B in case I were next?

Anyone is fair game in this rollercoaster of a job market. It doesn’t matter how talented you are, or how long you’ve been at a company — when costs need to be cut, people are part of the collateral damage. 

I’ve been planning for a layoff ever since the pandemic. I know that sounds dramatic but the pandemic taught me that things can change in an instant. Of all the things to affect your job, I never imagined a global disease to be one of them.

Thankfully, I could do my job remotely and weathered the pandemic storm, but you never know what new curve balls will be thrown your way. I’m just waiting for the day when AI takes over and I get fired by a robot. I kid, but sadly it doesn’t sound so farfetched.

Even if you don’t feel your job is in jeopardy, it never hurts to have a plan B or C in place. As I was contemplating my backup plans, I ended up with a checklist to prepare.

Here is what made the list.

How to Prepare for a Possible Layoff

Do a Financial Audit

Not sure how to prepare for a possible layoff? Start with your financials.

Each month I do a quick financial audit. I do it on the 15th of every month to make it easy to remember. This includes tracking my balances, credit card charges, and overall net worth in a Google sheet.

The pandemic started my aggressive savings journey and I have continued building ever since. Some months I do better than others but I try to put something away every month. This month, I decided to go a little deeper to review spending and identify where I could cut back.

Step one is getting a handle on your financials. Step two is figuring out how to increase your savings rate.

If you’re ready to do a financial audit begin asking yourself simple questions. How long can you get by with the savings you have in place? How much debt do you have? Can you pay it off now? What are some of the things you can cut back on now to increase your savings? Are there subscriptions you belong to that you don’t need anymore?

There is a lot of buyer’s remorse out there but I don’t think anyone ever regretted saving their money for a rainy day.

In case you need extra motivation, my all-time favorite finance book is Quit Like a Millionaire.

Update Your Resume and LinkedIn

If you feel like there is a chance you will be on the job hunt soon, then make sure your resume is in a good place. This is a task I try to do once or twice a year. Not because I’m always looking but if I wait too long I may forget to add important details from a position that I held.

Pro Tip: email a PDF and Word copy to yourself and keep it in your inbox. That way if your computer dies, or you saved it on your work device instead of your personal, there is always a copy in your inbox.

Your LinkedIn should be a condensed version of your resume. Make sure it’s up to date and use a variety of keywords throughout your profile to ensure it shows up in recruiter searches.

Explore Freelance 

If you’re laid off from your corporate job, there is always the opportunity to take a stab at doing your normal job as a freelancer. You may not make the same amount of money at first but it could help to soften the blow. You might build up a solid client base and not need to go back to a corporate job. Better yet, freelancing could lead you to your next opportunity.

I find that your network is always the best place to start when it comes to freelancing because those people know your work. You can also research other sites in your field that can connect you to jobs. There are sites like Upwork and Fivver where you can find new leads in a variety of fields.

Identify Your Network 

Do you know who your people are? Who in your network would bend over backward to help you find a job or land consulting work? Who in return would you help to do the same? Do you keep in touch with them regularly? Identify your network and touch base regularly.

It’s better to do it often than to reach out only when you need something. It’s also great to help those people out whenever you can. Schedule catch-ups over the next few weeks. Let people know you are casually exploring new things. This is how I landed my dream job at CBS.

Evaluate Potential Side Hustles 

If you think you are going to be laid off, it could be worth evaluating potential side hustle ideas related to your interests and skills. Similar to freelance work, it can take time to build up a side hustle to generate significant income but it could be a great way to offset some of your financial losses.

There are many benefits to doing side gigs like the opportunity to learn new skills, make connections, and create new income streams. While you are still employed, take some time to research and vet options. Even better if you can start a side hustle while you are working.

Define Your Worst-Case Scenario 

If you feel there is a possible layoff on the horizon, I’m a fan of prepping yourself mentally. The stress can take a toll.

I once read The 4-hour Work Week by Tim Ferriss. I remember him talking about a “fear setting” exercise where you write out your worst-case scenario and brainstorm on how you would survive. He talks about it on his blog as well: 

“Then a funny thing happened. In my undying quest to make myself miserable, I accidentally began to backpedal. As soon as I cut through the vague unease and ambiguous anxiety by defining my nightmare, the worst-case scenario, I wasn’t as worried about taking a trip. Suddenly, I started thinking of simple steps I could take to salvage my remaining resources and get back on track if all hell struck at once. I could always take a temporary bartending job to pay the rent if I had to. I could sell some furniture and cut back on eating out. I could steal lunch money from the kindergarteners who passed by my apartment every morning. The options were many. I realized it wouldn’t be that hard to get back to where I was, let alone survive. None of these things would be fatal—not even close. Mere panty pinches on the journey of life.”

I found this exercise so impactful. When you start to define your worst-case scenario, you also begin to think about how you can turn things around.

Instead of dreading it, you can plan how you will get out. Suddenly, that worst-case scenario doesn’t seem as bad.  

Final Thoughts: How to Prepare For a Possible Layoff

Overall, thinking through how to prepare for a possible layoff is a great way to put your fears at ease. Tackling it head-on allowed me to put a strategy in place. Layoffs can seem scary but they are also largely out of our control. With a little planning, we can come up with a few options and hopefully even avoid our worst-case scenario.

In life, I’ve largely found that things fall apart to make room for something better. I try to remind myself of this whenever I’m going through a hardship of any kind.

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