What to do if you get laid off - The Complete Layoff Guide

It seems like, lately, the word “layoffs” has been floating around more than usual. With news of major layoffs from heavy-hitters like Netflix and Tesla, it’s not surprising that you might be wondering if your job is as secure as you’d like it to be. Or, maybe you’ve already found yourself in the unfortunate position of being laid off, and you’re wondering what your next steps might be. Either way, it’s always a good idea to have an exit plan in place if the worst should happen. It’s never too late to figure out how to handle an unexpected layoff, and we’ll walk you through the process – whether you’re planning for a worst case scenario or it’s already happened – and, hopefully, you’ll feel confident taking your next steps in your career journey.

What Does it Mean to be Laid Off?

Where being fired or terminated means you’ve done something that goes against your employment contract (usually not doing the work assigned to you, or under-performing, but we’ve all heard some pretty wild stories about why people get fired!), being laid off means you’re losing your job through no fault of your own. Usually, this happens because your company no longer has the money to keep paying you, but there are some other situations (mergers with other companies that lead to redundancies, for example) that can also occur.

The good news is that being laid off is looked at much more favorably than being fired. When you find a new job, you won’t have to work against any existing reputation that being fired might have given you. Instead, you can emphasize everything that made you a great employee that your previous employer was sorry to have to say goodbye to.

If you have been fired, rather than laid off, that usually means something you did on the job didn’t align with the normal duties of your position. While it’s certainly favorable to have been laid off rather than fired, the latter is by no means a career death sentence. If you’ve been fired, you can explore your options in our article here.

What Should You Do If You’re Laid Off?

First thing’s first: what are the terms of your layoff? Before you make any moves, speak with HR and your manager to determine what your company will be providing you. Many companies offer a severance package with compensation meant to keep you afloat while you’re searching for your next job. However, this isn’t a legal requirement in many cases, so be prepared to hear that you won’t be receiving severance in the event of a layoff.

Even if you aren’t receiving severance compensation, that doesn’t mean there’s nothing your company can do for you. You should receive a layoff letter that you can use while applying for your next position. If a potential new employer notices a gap in your resume, or asks why you’ve left your previous job, you can now prove that you were laid off for reasons outside of your control, rather than fired for poor performance, for example.

If you have an otherwise-good relationship with your manager, other higher-ups, or coworkers, make sure to take down contact information if you don’t already have it. In your upcoming job hunt, you’ll be able to use your former co-workers as references, who can further attest to all of your wonderful skills and qualities in your new job search.

Once you’ve collected your final paycheck and determined what, exactly, your now-former employer is offering you as part of the layoff process, you should focus on yourself and your finances. If you’re eligible, and you need it, apply for unemployment as soon as possible. Even if you’re reasonably sure you’ll have a new job soon, it’s always good to have any kind of money coming in. The more secure you are financially during this period, the less likely you’ll be to take a job that isn’t the right fit, just for the sake of having a job.

Even if you aren’t currently in danger of being unemployed, take advantage of that security and make a plan in case an unexpected layoff does occur. Take a look at your financial situation – how much money comes out of your account per month, and how much do you bring in? What could you cut out of your budget if you had to in order to save money? How much money do you have in savings right now, and is it enough to sustain you for one, two, three months or more, while you look for a new job? While of course it’s not always possible to add to your savings, during a tumultuous period for many, it may make sense to prioritize saving just in case. If everything turns out fine, you have extra money saved up; if you end up getting laid off, you have a safety net.

What Are Your Legal Rights After Being Laid Off?

Often, your first instinct when learning you’re being laid off is to ask what can be done about it. Can your employer even do this? Is it even legal to leave someone without a job and not even pay severance?

Well… yes or no, depending on your state and situation.

Give yourself a day or so to let the dust settle, so you don’t make any big decisions while going through heavy emotions. After that, though, you should do your research and figure out what laws are in place in your state to protect employees. It may be beneficial to speak to other employees who were also laid off, if applicable, and work together. Remember that employers aren’t allowed to discriminate in layoffs – if, for example, every employee who was laid off was female, it could be that your former employer used layoffs as a cover to terminate female employees specifically, which is illegal.

The WARN (Worker Adjustment and Retraining Notification) Act requires employers with 100 or more employees to give at least 60 days’ notice before conducting a mass layoff. Keep in mind that, for the purposes of this act, a “mass layoff” means that either at least 500 employees at a single job site will lose their jobs, or that 50 to 499 employees lose their jobs, if they make up at least one-third of the work force. (Keep in mind, however, that the WARN act, or your state’s version of it, has exceptions. For example, there’s a provision for an “unanticipated and dramatic major economic downturn,” which was used by many companies during the Covid-19 pandemic.)

If you’ve researched and found that your layoff was done legally and professionally, you still may have other legal rights. Check your employer’s policies for severance information. You also have the legal right to your final paycheck – depending on your state, it could be legally required for your employer to give you your final paycheck upon notifying you of the layoffs. Some states also have laws in place that give you the right to continue your health insurance plan for 18 months. This is a legal right under COBRA (Consolidated Omnibus Budget Reconciliation Act) in order to help provide for you while you find a new job.

How to Find a New Job After Being Laid Off

Of course, your top priority after being laid off is, most likely, finding a new job. Your game plan will vary depending on your situation. For example, if your industry is currently thriving, with plenty of jobs on offer, it may be as easy as updating your resume, putting together a great cover letter, and going from there. If your industry is more competitive, or if it’s currently in a slow period, then you may have to think creatively.

Speak to your network and let them know you’re looking for a new job. Attend networking events – even if you aren’t usually the “networking type,” you never know who you’ll meet and what kind of connections you could build. When you do see job postings that would be a good match for your skills, research them carefully. Do you have any contacts who already work for that company? They may help you get a foot in the door.

Some people consider being laid off to be the “wake up call” they’ve been needing to jolt them into action for a big life change. Maybe you’ve always wanted to move to a different city, where your industry has a larger presence. While that can be difficult when your income is limited, it could pay off in the long run. Others consider changing industries after being laid off. Think about your skills and interests – is there a better way for them all to work together in your career? Will you need any additional certifications or experience to successfully change industries? Depending on your financial situation and experience, you might take this opportunity to re-train, re-focus, and find a job in a new industry.

Regardless of your strategy, one thing’s for sure – you’ll need to update your resume and prepare for an eventual job search. If you’re stuck, VisualCV’s resume templates can help get you started. Or, if you think you need even more of a boost, consider hiring a resume writing service, or having your resume professionally reviewed.

How to Explain Gaps in a Resume

Of course, we always hope that in the event of a layoff you’re able to find a new job so quickly that you don’t have a gap in your resume (or at least one not big enough to be noticeable). Unfortunately, that isn’t always possible, and it’s a good idea to understand how to explain those gaps before you make it to the interview process. Or maybe, if the gap is particularly large, you want to address it in your resume itself. Thankfully, resume gaps are becoming more common as people fight for a stronger work-life balance and pursue other types of work and experiences, but it’s still best to be up-front with recruiters.

While employers are almost always ready to listen to your story and explain your situation, you still need to think about the best way to explain. Since there are so many different ways to do this, and so many different reasons for taking time off of work, we’ve put together a complete guide to explaining gaps in work history, which you can find here. Most importantly, though, remember that you should never lie or try to hide a gap in your resume. It’s much easier to explain what happened to a recruiter than it would be to get caught in a lie!

How to Answer “Why Did You Leave Your Last Job?” When You Were Laid Off

There’s one key thing that will keep you from embarrassing yourself or losing out on opportunities here: tell the truth.

Let’s repeat for emphasis: always tell the truth about having been laid off. There’s absolutely no shame in being laid off, and no reasonable employer would ever consider being laid off a red flag. Layoffs are an unfortunate by-product of doing business in a world where things move very quickly and can change in the blink of an eye. Especially in the current climate, when it feels like companies are announcing new layoffs every day, you shouldn’t feel like sharing that you were laid off will hurt your chances at getting a new job.

Be clear, concise, and explain the situation. “Unfortunately, I was laid off when my former company could no longer afford to keep me on,” is often all you need to say. If they ask further questions, or you feel like it would be beneficial, you can always bring along the layoff notice you received at your former company, or a letter from your previous employer explaining that you were laid off for no fault of your own. If your potential employer has any questions or is unsure of the nature of your layoff, this should clear things up.

Being laid off is many people’s worst nightmare situation; especially if the layoffs are unexpected or you haven’t thought about what you might do if it were to happen to you. Thankfully, being laid off isn’t the end of the world – or even the end of your career! In fact, with the benefit of hindsight you may even look at this moment in time as a turning point, when you began to level up or found the career path you were always meant to take. If that seems like a long way off, though, you can begin by revamping your resume and cover letter, and getting back out there.