7 Things You Can Do to Prepare to Get Laid Off From Work

There is no question that technological change and shifting consumer preferences are causing many companies that are household names to falter. Once sources of stable employment for thousands of workers, many of these one-time pillars of the economy are forced to go into bankruptcy, merge with one-time rivals or reorganize — or shut down completely.

For employees of companies, these shake-ups inevitably lead to layoffs of some kind. Companies going into bankruptcy are looking to reduce costs wherever they can, which often means job cuts. And in a merger, it’s cheaper to run one company than two, so “redundancies” will be eliminated — or, in plain language, jobs will be going away.

So if you are an employee of a company going through one of these transitions, how can you prepare if there is a chance your employer may cut your job?

  1. Update your resume

    To start, update your resume to highlight your most recent experience. This is an obvious necessity should you need to re-enter the job market, but it also will give you a chance to reassess and promote your talents to the company.

  2. Figure out how your experience will save the company money each year

    Let the executive team know you are looking for new responsibilities. Highlight what role you could play in the transition and the cost savings it involves for keeping you there.

  3. Build up your cash reserves and categorize your bills into two piles: Necessities and luxuries

    What bills can you do without? Can you cut that premium cable package or golf club membership? Do you need that extra car? The bottom line is, should you get laid off and suddenly find yourself relying on unemployment checks, figure out which bills are absolutes — heat, mortgage, groceries — and which ones can be cut to free up extra cash.

  4. Consider refinancing

    Having a job means you can still qualify for a loan. So now is the time to look into a new and more affordable mortgage that could ease your monthly financial obligations should you face a layoff.

  5. Evaluate your benefits

    Losing your job means losing health and life insurance, retirement savings, possibly tuition reimbursement and more. Spend time assessing potential next steps such as the cost of private insurance, rollover opportunities for your 401(k) into an IRA, and the tax implications of cashing out company stock. Talking with an Edelman Financial Planner can help guide you through each scenario to help create a clearer picture about your future should you stay or leave the company.

  6. Determine if a buyout or early retirement package is right for you,

    If you are offered a buyout or an early retirement package, you should know the right move to protect yourself. Now is the perfect time to talk with an Edelman Financial Planner to assess whether taking a buyout package or an early retirement offer is the best option for your situation.

    One common outcome of company shake-ups is that pensions are dissolved into either a defined annuity or a lump-sum payout. Faced with that choice, you should know which one is best for your pension. A financial planner can help you determine what choice to make; each one has specific tax implications and could be the right choice depending on your particular reserves.

    The sudden disruption in your work life could be a blessing in disguise for your personal life. Maybe now is the right time to retire. Being forced to assess your portfolio and incoming severance package might reveal that you do indeed have enough to retire sooner than anticipated.

  7. Consider whether moving is an option

    If your company is relocating jobs to a different state, maybe one you always imagined moving to someday, now might be the perfect time to have a family conversation about the future. Are your kids the right age for a cross-country move? Does the new location present a more affordable standard of living or are housing and school costs more than double than what you are paying now? If relocating to the new company site makes the best financial sense, having your company potentially cover transportation and moving costs is that extra lagniappe to sweeten the decision.

All of these are difficult decisions that require time, thought and knowledge. An Edelman Financial Planner is a perfect resource to explore the options of what is being offered versus what you already have in reserve. Consulting with someone who has your best interests at heart will smooth out the process, plus give you the confidence that you are making the right choice for your next chapter in life.

More Life Events Advice