What to Do if You’ve Been Laid Off

What should laid off workers do if they find their job eliminated? What can you do if you’re employed now, but suspect job loss is on the horizon? We’ll break down steps you should take if you are laid off or are worried a layoff is imminent. Getting laid off can be scary, but don’t panic. Take a deep breath, remind yourself it will be OK, then get to work. Here’s what to do if you’ve been laid off.

1. Prioritize Mental Health

Being laid off stirs all kinds of emotions: guilt, anxiety, frustration, you name it.  A sudden loss of income might make you feel tempted to cancel therapy appointments, stop paying for anti-anxiety medicines and spend every waking second applying for jobs.  But working on your mental wellness during a layoff is crucial. Stay on medications, keep going to therapy, get outside, work out, visit friends and family, and meditate. At The Penny Hoarder, free is our favorite word. These companies give you food and other products for free.

2. Head to the Doctor and Shop for Health Insurance

Physical health also is important after a layoff. Your health insurance coverage will eventually expire following a layoff. See a doctor and dentist while you still have health insurance coverage through your former employer. While we’d like to think the layoff is temporary, some people take months — or years — to find a new job. Just in case, purchase basic health insurance coverage for you and your family for this interim period.

3. File for Unemployment

Apply for unemployment benefits as soon as you’re laid off. You likely won’t receive as much as your paycheck, but every cent helps to stay afloat. Each state administers its own unemployment insurance benefits, so you’ll need to use your state’s resources to determine how to apply, how to keep benefits active and how much you’ll receive. Filing for unemployment is relatively easy, and the payments can start quickly — crucial if you’re living paycheck to paycheck and don’t want to fall behind on bills.

4. Get Into a Routine

When you no longer have to wake up for the morning commute (or even wear pants!), it can be easy to sleep in, spend the day on the couch and get little to nothing done. It’s important for your mental health (and productivity) to establish and stick to a healthy routine. Maybe that means waking up each morning to walk the dog, then make breakfast and spend a few hours applying to jobs. Stay active and motivated!

5. Get a Balance Transfer Credit Card

If you have high-interest credit card debt and no income beyond your unemployment benefits, the debt can quickly spiral out of control. See if you qualify for any 0% intro APR balance transfer credit cards and move the debt over. Then stop using credit cards. Only purchase things you have the money in your bank account for. The best balance transfer credit cards offer 12 to 21 months of no interest on any balances you transfer, giving you time to pay off that debt without accruing additional interest after your layoff. Want more money-saving secrets like this? Here are eight more you should try.

6. Pause Discretionary Spending

Being laid off is tricky. It’s important to have fun, but everything in moderation. If you have multiple streaming services, consider canceling all but one. If you have a European vacation scheduled soon, you could postpone that for a year and instead do a cheaper getaway to a nearby city. No one can know for sure how long a layoff will last. Your safest bet is to cut costs wherever possible.

7. Stash Your Severance Pay

If your current employer offers you severance pay as part of your layoff, put as much of it as you can in a high-yield savings account, accessing it only when you need it to pay necessary bills. You never know how long unemployment will last, so try not to burn through your severance pay. A severance package will often include more than just money to temporarily cover lost wages. Some employers extend health insurance coverage to former employees for a set amount of time, and others may offer outplacement services. You may also be able to negotiate your severance package when you are laid off. During severance negotiations, ask about unused vacation days — many employers will pay those out.

8. Don’t Forget Your 401(k)

If you have a retirement account through your former company, you can typically get a lump sum payout, which can help you cover expenses while you’re job hunting. Alternatively, you can roll over an employer-sponsored 401(K) into an individual retirement account (IRA) or a new 401(k) with a new job.

9. Rely on Your Network

Starting from scratch during a job search can be frustrating. Applicants are fighting for the same jobs you are. Getting your foot in the door is easier if you get help from a colleague. That’s why it’s important to maintain professional relationships. Help former colleagues and connections when they’re searching for a new job — and they might be willing to help you when you’re laid off and in need of work. You may also be able to utilize career services from the college or university you graduated from. Another life hack? Stop spending too much money on these five dumb things.

10. Update Your Resume

Your resume is your first impression with prospective employers, so make yours sing. In fact, if you’re applying for different types of roles in different industries, you might want to have separate, tailored resumes.If you haven’t touched your resume in years, work with a trusted colleague or career counselor if you’re not sure where to start.

11. Apply for Jobs

Start your job search as soon as you can, and commit yourself to applying for jobs, prepping for interviews and expanding your skills for a set number of hours each day. Treating your job search like a new full-time job can help you get a new job faster. Sites such as LinkedIn, Indeed and Glassdoor are great for conducting your job search, but you can also find job boards more specific to your industry. Make your resume stand out by tailing it to the company and role you’re applying for, and consider adding a cover letter that details why you’d be a good fit. If you make it to the interview round, follow up with a thank you to the recruiters and hiring managers to leave a lasting impression.

12. Get a Temporary Job

Getting a job within your industry that pays well and offers the benefits you need might take a while. In the meantime, get a temporary job, even if it’s not in your field or at the pay rate you’re looking for. Many industries are hiring for basic data entry, manual labor and customer service. Snag one of these jobs for now to help pay the bills, and bid it adieu when you find the right long-term role in your field. Try one of these 50 ways to make extra money this month.

13. Consider Freelance Work

Another way to stay busy, maintain income and avoid gaps on your resume is to convert your skill set from your former employer into a marketable service as a contractor. In content creation or graphic design? Leverage contacts from your former employer as well as connections on your LinkedIn profile to launch a freelance writing or design business. Have experience in sales, website design, social media, IT or content marketing? Become a contracted consultant to decision makers at major companies. Depending on your background, you could get certified as a substitute teacher or online tutor. If you can’t find freelance work within your industry, you can take on other contractor labor during your job search. This includes food delivery to rideshare to dog walking and handyperson services.

Recap: What to Do When Laid Off

Layoffs take you on a roller coaster of emotions, and it’s OK to fully go through those emotions. But then it’s time for action. If you’re laid off, work with your former company to understand how your severance benefits work and when you’ll receive your final paycheck, then file for unemployment, update your resume and search job boards. Stay active with your network, reach out to hiring managers and focus on your mental wellbeing.