What to Do in Case of a Layoff

Experiencing a job layoff is a challenging event, but taking prompt, methodical action helps safeguard your immediate financial health, healthcare coverage, and future career prospects.

What to do first

1. Clarify details with your employer: Ask about your final paycheck date, payout for unused paid time off, severance pay structure, and the official end date of your workplace health insurance. Request all termination terms in writing.
2. Review the severance agreement carefully: Do not feel pressured to sign a severance agreement immediately. Take time to review all clauses, including non-compete agreements, non-disclosure requirements, and release of claims. Consider consulting an employment lawyer if terms are complex.
3. File for unemployment benefits: Apply for state or national unemployment compensation right away, as initial processing can take several weeks. Gather required documents such as your formal separation letter, recent tax forms, and pay stubs.
4. Secure ongoing health coverage: Evaluate your options for continuing coverage through programs like COBRA or public healthcare exchanges. Compare premiums and coverage limits to choose the most cost-effective option before employer coverage expires.

Managing your finances

• Audit your household budget: Pause non-essential recurring payments, subscriptions, and discretionary spending. Calculate your baseline living expenses for housing, food, utilities, and debt payments.
• Contact key lenders early: If you anticipate difficulty paying a mortgage, car loan, or credit card, call your lenders right away. Many institutions offer hardship programs or temporary payment deferrals.
• Protect retirement savings: Avoid early withdrawals from retirement accounts whenever possible, as premature distributions usually trigger taxes and financial penalties.

Navigating your job search

• Update application materials: Revise your resume, cover letter template, and online professional profiles to highlight recent achievements, certifications, and technical skills.
• Reach out to your network: Privately inform former colleagues, mentors, and industry contacts that you are seeking new roles. Direct personal referrals are often the most effective route to new positions.
• Establish a daily routine: Treat your job search like structured work. Allocate set daily hours for applying, networking, and developing new professional skills.

What NOT to do

• Do not sign severance papers instantly: Avoid signing documents without reading all terms and knowing your rights.
• Do not criticize your former employer publicly: Avoid posting negative comments on social media, as this can deter future employers.
• Do not delay benefit applications: Postponing your unemployment filing delays your income stream when you need it most.

Focus on maintaining a daily routine while actively managing your finances and job search. Reach out to local workforce development centers or financial planners for additional guidance.