What to Do When You’re Laid Off


Layoffs are just not stopping. More than 230,000 layoffs in 2023 followed the 15.4 million in 2022.

When it happens, all kinds of emotions—shock, frustration, fear—may paralyze you and prevent you from taking action to secure your future.

The immediate goal is to look forward—because once the decision is made to exit you from the company, it never changes. Here are eight steps you need to take to protect your interests and five ways to prepare for the job search ahead.

8 Steps to Take When You’re Laid Off

Before you begin your new job search, it’s important to protect your interests. As soon as your company notifies you of the layoff, follow these steps:

1. Collect the Last Paycheck

Ask when you will receive your last paycheck and what it includes (such as unused vacation and reimbursement for work expenses). Some companies will send a physical check. Others will do a final direct deposit.

Ensure you understand what your last paycheck will include and take the time to calculate whether the amount is correct. People make mistakes; never assume it’s correct just because it came from your company payroll.

2. Review the Severance Agreement

When companies do mass layoffs, they usually have a policy of what they will pay for severance—if anything. There is no law that says a company must provide severance. If you are offered severance, review the agreement that will need to be signed to receive it, which may include a contingency of returning any equipment.

Determine whether you need to return every company-provided item—computers, monitors, accessories, home office furniture—or the bare minimum that needs to be returned. Don’t lose out on severance because you misread the requirements.

More on Layoffs from Newsweek

3. File for Unemployment

Do not wait. There is nothing embarrassing about unemployment, and most states have a waiting period after being laid off before unemployment benefits kick in.

The unemployment payments may be low compared to your previous paycheck. But unemployment payments could cover food or gas or some of your expenses to hold you over until you can land that next opportunity.

Each state administers its own unemployment benefits. If you are unsure how to apply for unemployment benefits, you can find your state on the Department of Labor website.

4. Secure Continued Health Insurance Coverage

If you are on the company’s health insurance plans, determine when coverage will end. Next, review whether paying for COBRA continuation coverage is the right option or whether it would be better to join a spouse’s insurance plan, if applicable.

Note that your layoff is considered a qualifying life event, so you can enroll in a spouse’s healthcare plan outside of the typical enrollment window.

5. Review Retirement Plan Terms

If you have a 401K or other retirement incentives, investigate the best options for what to do you’re your savings. The options are:

  • Leave it where it is, in the company investment plan
  • Roll it over to a separate brokerage account
  • Wait until you are employed again and determine if you can roll it into your new employer’s plan

Consider the fees involved in each option and whether you want more control over where your retirement savings are invested. When you have your money in any employer’s plan, you don’t get to choose your investments. Plus, fees may or may not be higher.

But fees and costs must be disclosed, so research and compare different options between your employer and other brokerage houses, such as Schwab, Fidelity and Morgan Stanley. Even a small amount of money in your retirement plan could add up over the years, so don’t ignore investigating the best option for you.

One thing you won’t want to do is an indirect rollover, where you have the funds transferred to you directly and not into another retirement plan such as an IRA. This could easily result in additional taxes and fees, which will eat into your well-earned retirement savings.

Stock image of an office worker packing their desk after being laid off. While layoffs can be stressful, it’s important to take steps to protect your interests and find a new role.
Mediaphotos / Getty Images

6. Understand Continued Use of Heath Savings Accounts

When you are terminated, you still own your Health Savings Account (HSA). Reach out to the plan administrator and understand how to best use your HSA. Ask the following questions:

  • “Can I still seek reimbursement for qualified expenses from your HSA?” Generally, the answer will be yes, but ask if there are any limitations.
  • “Can I contribute to my HSA from my own savings account?” Discuss any tax advantages in doing so with your accountant.
  • “What are the administrator costs if I keep my HSA with you and continue to use it?” Your employer will no longer be responsible for HSA administrator fees, so make sure you aren’t surprised by how much those fees eat into your HSA.
  • “Can I use my HSA to purchase COBRA or other insurance plan premiums?” Generally, yes. If you are receiving federal or state unemployment benefits, you can use your HSA to pay for these premiums. When your unemployment benefits end, you cannot use your HSA to pay for premiums.

7. Review Equity Grants

If your company provided grants of equity such as stock options or restricted stock units (RSUs), you should review what actions you need to take to protect against losing vested stock. While vested RSUs are yours, you will need to exercise vested options within a certain time period based on the stock program at your company.

Here are a few things you should find out before leaving your company:

  • “What is the time limit for exercising vested options?”
  • “Are there any blackout dates when I’m not allowed to trade?”
  • “Are there tax or investment advantages to exercising and holding vs. exercising and selling?”

Once you determine what to do with your equity, decide if you want to leave it invested at the current investment trading platform or whether it’s more beneficial to consolidate with your other investments at another brokerage.

8. Update Your Budget

What do you need to survive? Do you need a job immediately to pay rent? Are you willing to incur debt? This is the time to update your budget with your baseline expenses—transportation, housing, food—to determine what amount you will need to survive.

Updating your budget will also help you understand if you need to cut all luxuries or just some to help your severance check and unemployment benefits last longer. Discover suggests starting an emergency fund of three to six months of expenses in advance to prepare for unexpected stressors like job loss.

5 Ways to Prepare for the Job Search Ahead

After you’ve filed for unemployment and ticked off all the necessary boxes, it’s time to start your job search. Here are a few things you can do to secure interviews:

1. Create a Forward-Looking Resume

Resumes are not meant to be a long list of what you have done. Update your resume based on the new job or career you will be seeking. What requirements are needed for the jobs you are interested in?

Ensure all relevant requirements and keywords from job descriptions are in your resume to demonstrate you have the skills and capabilities to do the new job. If you are transitioning careers, connect the dots between your experience and your capability to be successful in the new career.

2. Draft a Cover Letter

It can also be helpful to create a short cover letter detailing how you’re using this opportunity to upskill. Or, mention how you found this layoff as an exciting opportunity to search for the next challenge because you didn’t have time to job search at your previous job. This is your opportunity to explain anything that doesn’t fit on your resume such as your grit, soft skills and values.

3. Update Your LinkedIn and Ask for Recommendations

Once your resume is updated, update your LinkedIn profile. Ensure you have an “About” section where you can add a sentence or two about who you are professionally and your areas of expertise. (Bonus tip: include all the requirements and keywords from job postings you’ve applied to.)

Next, request recommendations from at least two colleagues and one manager. If you are a leader, request a recommendation from one of your direct reports, specifically about how you developed them to be successful in their job.

Recruiters do read recommendations on LinkedIn! This is a great opportunity to have someone discuss “how” you do your work—how you collaborate, influence, align stakeholders—which are harder to convey on a resume.

4. Tap into Your Network

Once you know what you want to do and what kind of company you want to work for, reach out to your network. However, do not ask your network to “tell you if they know of any open roles” in multiple areas.

People who are not looking for a job won’t know if something exists. And people who don’t work in your field won’t know about anything in your field. Focus on making connections where you have already identified potential opportunities.

Here is an example of what you can post on your LinkedIn or send to your contacts when you don’t see a specific opportunity:

Hi John,

I was recently part of [company name’s] last round of layoffs. I am confident I can bring value to another company, and I am seeking a new opportunity. Here is exactly what I am looking for and would welcome any connections you can make to recruiters, colleagues or friends to help me land my next position:

Job: Director or Sr. Director, Business Operations

Company size: Large / More than 10,000 people

Work model: Onsite or Hybrid

Location: Greater Dallas area

Relocation: No

Travel: Yes, as often as 50% of the time

Salary range: $120,000+

Thank you for your help in making connections within your company or with a colleague or friend at another company who you think may be a valuable resource in my search.

Thank you,

[Your name]

If sending to a contact where you have identified a potential job fit, then you can simply write:

Hi John,

I was recently part of [company name’s] last round of layoffs. I am confident I can bring value to another company, and I am seeking a new opportunity. I noticed this job [name and link to posted job description] at your company and I would love an introduction to the recruiter or hiring manager to learn more about the job and how I could bring value to the position.

Would you be comfortable recommending me for the position and making the introduction?

Thank you!

[Your name]

5. Create a Job Searching Plan

Applying for jobs can feel like a full-time job itself. It can help to plan a schedule time blocks for the following:

  • How many hours a week you’ll research potential opportunities
  • How many jobs you’ll target to apply to each week
  • How many meet-and-greets you’ll take with connections

Having a plan will give you structure to your days and help you feel like you know exactly what to do every day. It will prevent you from feeling like you are not doing enough or you are chained to your computer when there is nothing more to do.

On the Road to a New Role

Being laid off is never easy. If you experienced trauma in your last job, such as an oppressive manager or harassment, you may also need to seek professional help to recover. Your state of mind will impact how fast you can move through these steps and find the next job that will hopefully be a better opportunity and more fulfilling than the one left behind.

About the Author

Marlo Lyons is a certified career, executive and team coach and author of Wanted—A New Career: The Definitive Playbook for Transitioning to a New Career or Finding Your Dream Job. Marlo has spent more than 20 years inspiring, motivating and empowering people to excel in their careers and businesses. She helps leaders at all levels to achieve their desired career goals and empower their employees to reach optimal performance. Marlo developed Career Transition Strategies® from her experience coaching hundreds of clients in many industries, her role as a human resources executive in startups and Fortune 500 companies, and from transitioning from TV news reporter to entertainment lawyer, HR business partner and certified coach. Contact her at marlolyonscoaching.com.


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