The Layoff Survival Handbook


What to do before, during and after a layoff

Executive Summary

  • How to reduce your odds of being laid off
  • How to prepare for a layoff
  • Essential steps to take during the layoff process
  • Post-layoff success strategies

Whether or not you perceive your job to be in imminent jeopardy, there’s a series of sensible steps to take now to defend yourself against becoming the victim of a layoff.

These steps will not only reduce your risk of being let go, but they’ll boost your performance, the value you offer an employer, and increase your satisfaction with your career. What’s not to like?


should you be unable to avoid a layoff, you’ll be far better offer for having put these preparations in place beforehand. Especially if we indeed re-enter a period of mass layoffs like 2007-2009, when millions of other sacked workers will be suddenly competing for the few existing job openings out there.

What To Do While Still Employed

The best way to begin protecting the security of your job is to ‘first prepare for the worst’.

47% of US workers describe themselves as not prepared to handle a layoff. Don’t be one of them.

Emergency Fund

A layoff ends your income. Abruptly. So make it your first priority to build up a fully-loaded emergency fund. This should be a minimum cash reserve of 3-months worth of living expenses.

The average modern-day job search takes 5 months, so it’s wise to bump that cash reserve up to 6-months or more, if at all possible. It’s a heck of a lot harder to pursue the job you want if lack of funds is forcing you to take whatever job you can get to simply afford to eat and have a roof overhead.

Downsize Plan For Your Cost Footprint

Concurrent with your efforts to build up cash reserves, look at your current living expenses and ruthlessly identify areas where you can cut costs if need be.

Eating out, entertainment, club memberships, travel, etc are all luxuries you can easily live without. But where else can you cut?

Buying staples in bulk and using them to cook meals for the week. Carpooling, public transit and bike riding to cut down on gas and transportation costs. Co-habitating or taking on a renter/roommate to subsidize your monthly housing expense. All these are potential levers to bring your cost footprint down.

And if you’re laid off, chances are others in your community may be, too. Now, while times are still flush, enter into verbal agreements with your neighbors on ways you’re willing to support each other through a job loss.

Providing a meal once a week. Watching each other’s children to save on child care costs. Car sharing. Laundry help. There’s a ton of ways to support each other.

But get the agreement to help each other lined up now. Maybe even start practicing some of these steps now — why wait until you’re unemployed to reap the financial and social benefits of community support?

Additional Income Streams

The difference between losing 100% of your income vs 75% is night and day.

The latter will help cover essential living costs and can dramatically reduce your need to draw down savings.

Spousal income, side hustles, real estate, businesses, and passive investments are all ways to supplement your current paycheck. If you haven’t yet read our Primer On Investing For Inflation-Adjusting Income, you should do so now. It’s a fairly exhaustive report on the many ways to build additional income streams.

Skilling Up

The most valuable workers are the last to be let go. How valuable are you to your current employer?

Another good way to ask this question is: How replaceable are you?

Do you have skills and experience that would be hard for your employer to replace?

Make an honest assessment of your current knowledge base and expertise. Are there deficiencies in any key areas for someone with your job function? Are there new skills/credentials/licenses/certifications/etc you can acquire to make you more valuable to your employer and harder to replace?

If so, pursue these while times are still “good”. Your employer may actually be willing to fund some of these for you.

And even if you get hit by a layoff, these added capabilities and qualifications will increase your appeal to a new employer and help you stand out from the pack of other applicants.

Pre-Game The Job Hunt

Ideally, you’d already have another job opportunity lined up by the time a layoff notice arrives on your desk.

That’s only going to happen if you’ve been putting yourself out there beforehand.

You can do this by actively networking, having informational interviews with people and companies that interest you.

Update your CV/resume/LinkedIn profile and circulate it widely in the spirit of becoming better known within your industry. There’s nothing inherently threatening to your current employer in your doing that. You’re simply becoming a “connector” or an “influencer” or a “maven”, which increases your value to the company, right?

Being proactive in developing relationships and tapping the expertise of other professionals yields many benefits. Chief among them is that your drive and talents may get noticed and suddenly, new doors may open to you.

You don’t necessarily need to walk through them immediately. But should your company suddenly announce bad news, it’s hugely valuable to have these available to you.

Grinning & Bearing It

If you’re sensing challenging times ahead at your company, but for whatever reasons you want to keep your job for the time being, then play the “good soldier” game as best you can.

  • Make yourself indispensable — take on more work, more responsibility. Work harder than everyone else. Work longer hours, too. Be the employee who your boss thinks “I can’t fire this guy. He does the work of three people.” Obviously, this pace isn’t sustainable forever. But it can be enough to get you through the next layoff wave.
  • Make your boss look good — sadly, office politics matter. If your boss isn’t the actual decision-maker on whether you stay or go during a layoff, he’s influencing the decision-maker. Do everything you can to set your boss up for success, even if that requires swallowing some pride. Because if you don’t, he won’t care about you. Or if he does, that doesn’t help you if he gets fired.
  • Take important people out to lunch — not only is this a smart networking and learning strategy, but it offers helpful protective benefits, too. Faceless people get laid off first. The more decision-makers who know you (and hopefully like you), the more uncomfortable it becomes to let you go.
  • Create your own copy of key contacts & documents — your work computer is your company’s property and you may have to immediately hand it over upon being laid off. Be sure to have your own copies of key contacts and materials (that don’t violate company data handling policy, of course) on a personal device that you will want access to after leaving your firm.

What To Do When Laid Off

The actual layoff process is a whirlwind. It’s easy to get overwhelmed by the emotional shock, the flurry of information thrown at you, and the sudden disappearance of your weekly routine (and paycheck).

During The Actual Layoff

Here’s how to keep your head during the actual layoff itself:

  • Listen. Don’t react. — You’re going to be flooded with emotions, especially if this is a surprise. Don’t say anything rash in the heat of the moment. The person delivering the bad news is braced for blowback; nothing you say at this moment is going to change the outcome, except for the worse. Just listen to the conditions they’re laying out and take good notes.
  • Ask the following key questions —  Am I receiving severance, and if so, what are the terms? Is there outplacement help being offered? What’s going to happen with my benefits? These are all important for you, and your employer is not legally required by the Fair Labor Standards Act (FLSA) to offer them to you. So play ball at this moment and learn what support is being offered. For a longer list of good questions to ask, click here.
  • Don’t sign or agree to anything immediately — you may be asked to sign binding documents (non-disparagement, no-legal-action or non-compete agreements), possibly in exchange for more favorable severance terms. Don’t be pressured into signing away your rights. Take the paperwork home and fully digest it. Review it with an attorney if you have concerns.
  • Be sure you understand your legal rights — there are numerous laws that offer protections to employees during a layoff. For example, if you work for a large employer, the Worker Adjustment and Re-training Notification (WARN) Act mandates that you must receive written notice of a mass layoff a minimum of 60-days before it goes into effect. Some of these laws apply to all; some are related to age, minority status, disability, etc.  Here’s a good summary of the principal ones to be aware of. Consult a local attorney or the Equal Opportunity Employment Commission (EEOC) if you have questions or believe you may have grounds for a legal complaint against your employer.
  • Optimize your severance pay — typical corporate packages include 2-4 weeks of salary for every year worked at the company, up to some cap (usually 2-3 months). Push to make sure that any unused paid vacation time is added on top of this. And don’t hesitate to bargain here: there’s no downside to it. You can offer to stay at the company for a few more weeks/months to provide a smooth transition of your duties. Or perhaps your employer is open to keeping you on at a half-time basis. Or maybe they’re interested in employing you on a project basis in the future, as a contractor/consultant. HR is most concerned at this time with being hit with lawsuits or bad media coverage from angry departing employees, so they can be surprisingly flexible. This book, How to Engineer Your Layoff, is a helpful source of creative ideas for maximizing your severance package.
  • Ask for a letter confirming the layoff — this is very important if you think you may be filing for unemployment. You’ll need to prove you were laid off, rather than being fired or quitting, in order to be eligible.
  • Get copies of your past performance reviews — as long as they were favorable. These may be useful to show to potential future employers, as evidence of your positive past performance.
  • Ask your past bosses to serve as a professional reference — in many cases, your boss will be as gutted by your departure as you are. She’ll want to be of any help she can in getting you back on your feet fast. So provide her with a concrete way she can do that, one that will have value for you in the job market.
  • File for unemployment — if you want to tap into government assistance (and why not? your taxes help pay for it), get started on this asap, as it will take at least a few weeks until you receive your first check. Note that you need to apply for unemployment benefits in the state in which you worked, and each state’s filing process is different. Here’s an online service provided by the US Department of Labor designed to guide you through the process.
  • Extend your health benefits with COBRA — if you were covered by a health plan at work, you should be able to extend it for as long as 18 months under the Consolidated Omnibus Budget Reconciliation Act (COBRA). Note: you, not your previous employer, will be paying out-of-pocket for this coverage.

Once the dust settles and you’ve taken all of the above steps, it’s time to shift your focus to your support network and the job hunt.

Layoffs are a stressful time. For you, for those who care about you, and particularly for those who depend on you (spouse, children, aging parents, etc).

First, pow-wow with your immediate family. Make sure everyone knows what’s going on and is clear on what role you need them to play during the coming transition period.

Hopefully, you already have in place the 3+ months cash reserve and the cost footprint downsizing plan advised in the section above. Be transparent with your family about what the monthly spending limits are. Encourage them to find creative ways to cut additional expenses or bring in addition income in ways that will help the family without harshly affecting quality of life.

Get the word out to your extended family and friends. This is a time to rely on the emotional support of your community. And if you’ve already talked with your neighbors about how you’d be there for each other should one of you lose your job, now’s the time to put those commitments into action.

It can feel awkward to ask for help in this way. But remember, for a kindness to be given, it must be received. Put your pride aside and take whatever help you need. And commit to providing the same help in return once you’re back on your feet.

Next, prime your professional network. Let folks know that you’re now a valuable free agent hitting the market. Be as specific as you can about the type of work, position, companies and industries you’re most interested in. The more specific you are, the easier it is for someone to match you to a good–fit opportunity.

From here, it’s largely about the mechanics of the job search. Much of this is captured in the back half of our book Finding Your Way To Your Authentic Career. Buy that if you could use a refresher on the process.

But there are a few worthwhile pieces of advice to consider while pursuing the traditional job hunt.

First, social support is a huge catalyst. The research shows that having a supportive community is the #1 success factor for nearly any personal goal — weight loss, career transition, breaking addiction, etc.

So try not to go through the job transition process alone. Partner up with others who are going through it, too. Have a weekly check-in with them at a coffee shop or on Skype. Share ideas, encouragement, progress, setbacks, advice and humor. It will give you structure, accountability, and hope.

And if you can afford it, meeting regularly with a career coach and/or a therapist is highly recommended. If you’ve never worked with a coach before, this podcast will give you a good sense of what to expect. The cost of this professional support pays for itself many times over if it helps you find a ‘good fit’ outcome.

Second, push yourself to find part-time employment while you’re searching for your next full-time position. Even if it’s a low paying gig, there’s something about getting paid for your labor that is very healthy for the psyche. It reinforces that you have value, gives you a sense of accomplishment, and staves off the demoralizing stigma of being “unemployed”. Literally, even just a few hours a week at minimum wage is effective therapy.

And last, look at this time of forced transition as the universe’s way of asking you: What do you want to do with your life?

Entertain the idea that, rather than going back to the exact same work you’ve been doing, could this be an opportunity to effect your own personal “pivot” into a new, more fulfilling career?

The front half of my book Finding Your Way To Your Authentic Career presents a process for helping you think through this very “big picture” line of questioning. It can be daunting work, but for the two-thirds of workers who are unhappy in their jobs, successfully transitioning to a new industry and/or a new line of work that’s a better fit with their values, passions, aptitudes and goals can be life-changing. This podcast offers a sense for some of the transforming insights and benefits this process of self-discovery can yield.

Purpose As The Priority

At the end of the day, you may get laid off, you may not. I sure hope you don’t.

But looking at the bigger picture: you may end up making good money at your job, or you may not.

Either way, you’re going to be spending a tremendous percentage of your waking hours on this Earth performing some kind of work.

Whether we like it or not, our work is a big part of our identity and how we experience life. With so much uncertainty out there in today’s economy, we ask the question: What’s it all for? Why commit so much of our lives to working?

The simple answer is: to not starve or die of exposure. But the more existential one is: to be fulfilled and happy — i.e., to live with purpose.

You don’t have full control over what the economy will do, whether your present company will thrive, or what it will pay you. But you do have control over how you apply your labor and how you choose to spend your time on this Earth.

Over the course of your career, the money may come the way you hope it will. Or it may not.

But if you’ve awoken every day to work you think is meaningful, enriches your life, and fulfills you — then you’ve grasped the real brass ring in life. You’re certainly way ahead of the two-thirds of all workers who reluctantly trudge into the office every day to trade their happiness for a paycheck.

And the kicker is, if you’re doing work that feeds your soul, odds are you’ll outperform, as you’re playing to your innate strengths. And the money will follow as a result.

Which is why we so strongly advise folks not to get overly wrapped up in the rat race, in paychecks and titles and trappings of ‘success’. And instead focus on purpose. That’s where the real compensation lies in your career.