By George Paul
Last updated: Feb 15, 2023
Tech layoffs have picked up steam in the past month. So what’s next for these newly minted jobseekers? What steps do they need to take? And what things shouldn’t they do? Let’s dig in and find out.
The landscape of the tech employment market has been turned on its head with a seemingly never-ending stream of layoffs at some of the world’s most prominent tech companies and once-hot startups.
Cuts at Netflix, Klarna, PayPal and other tech behemoths have impacted at least 4,894 workers this month—the highest single-month total since September 2020, and May isn’t over yet.
Layoffs have left many tech workers in an unfamiliar spot after a decade of unbridled optimism and access to cheap funding that has kept many payrolls full and flowing.
So what’s next for these newly minted jobseekers? What steps do they need to take? And what things shouldn’t they do? Let’s dig in and find out.
A layoff is not your fault. I’ll say it again: A LAYOFF IS NOT YOUR FAULT.
It can be easy to feel this way and view a layoff as a personal failure or rejection, but remember: it is a business decision and has no say in your self-worth.
Losing your job can destroy your self-confidence and add undue psychological stress. All this, combined with the added pressure of finding a new job under a time crunch, is a lot to bear.
“Losing a job and being unemployed for a long period of time is a psychological trauma and a financial trauma, and the two are closely intertwined,” Carl Van Horn, a professor of public policy at Rutgers University told the American Psychological Association.
Be sure to carve out time to focus on your mental health, invest in self-care and maintain structure in your day. Get outside, read a book, exercise, start a hobby and visit friends and family.
If you are feeling anxious, stressed or depressed, make sure you talk to someone, whether it is a friend, partner, parent or trained professional.
If you don't receive a letter from your employer explaining the circumstances of your layoff, ask for one. It’s one thing to tell future prospective employers that you were part of a layoff, and another to provide evidence that you were not simply fired.
Depending on your layoff, you may get your final paycheck the same day you are separated from the company, or it may arrive in the next pay cycle. Make sure it’s for the correct amount, and that all the deductions are in order.
You may also want to break out your employee handbook to find out how the company treats unused vacation/sick days or PTO (paid time off), to see if you should expect reimbursement for those.
If you’re part of a mass-layoff, it’s possible you won’t get your final paycheck for a few months. The federal Worker Adjustment and Retraining Notification Act (WARN) requires employers to provide employees they’re laying off with 60 days’ notice, during which all wages and benefits will continue as usual, giving those who were laid off at least some time to brace for unemployment, or start finding that new job.
You have some options if you have a 401(k) plan with your current employer. If you have at least $5,000 in your account, chances are you can let it sit invested where it is — for now. When you get that new job, you’ll want to roll it over. You could also start a rollover IRA (individual retirement account), and place your old 401(k) there. The worst option, which is not advisable because it will hurt your retirement savings, is cashing out your 401(k). If you do this, you will pay a premium: federal and, where applicable, state, and local income taxes will be due on the lump sum, plus a 10% penalty for early withdrawal.
The rule of thumb for savings is to have at least three months of expenses saved up for a rainy day, but that always isn’t possible or realistic for some to achieve.
Many laid-off employees will likely receive severance pay and continued benefits for a period of time stretching from weeks to months. The typical severance package provides one to two weeks of paid salary for every year worked, but it should be noted there’s no requirement in the Fair Labor Standards Act (FLSA) for severance pay, so this amount may vary depending on your company and the length of time you’ve worked there.
You should also determine whether you’re eligible to continue receiving healthcare coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA)—a law that requires employers with 20 or more employees to offer continued health coverage to those who have lost or voluntarily left their jobs. COBRA lets you stay on your employer’s plan for up to 18 months, though your premium costs will likely increase, as your employer is unlikely to pay their side of the premium. Prepare to budget for these costs under COBRA. Alternatively, under the Affordable Care Act, you can shop for an individual health care plan on the state or federal exchanges, such as New York’s New York State of Health.
As soon as you become unemployed, you should reach out to your state’s unemployment insurance program, which provides benefits to workers who become unemployed through no fault of their own. These programs typically provide eligible applicants with benefits, including financial assistance, for around 26 weeks depending on the state and are sometimes extended in periods of high unemployment.
Don’t forget about other government assistance programs you may qualify for, like the Supplemental Nutrition Assistance Program (SNAP), which helps cover food costs.
Regardless of your financial situation, you need to establish a baseline budget by analyzing your savings and income streams and itemizing your essential and non-essential spending. Essential spending can typically be categorized as expenses like your rent/mortgage payments, car payments, child care, utilities and groceries.
Cutting back all non-essential spending is difficult, but it will give you the longest possible runway to find your next gig. The definition of non-essential differs from person to person but can generally mean a reduction in dining out, subscription-based entertainment services or frivolous online shopping. To do this you can use a free app, like Intuit Mint or TrueBill to help you find your subscriptions, manage bills and cancel recurring charges
Depending on your situation, you might find it necessary to take a part-time job to keep up with or get ahead of bills and other payments. These jobs don’t have to be in your current line of work, and could include food delivery or picking up shifts in a retail store. Look for industries experiencing high demand, and regularly check job boards for contract and part-time work in those fields to help close the gap until you land your next full-time job.
Sometimes an employer will offer laid-off employees the ability to work with a career coach or outplacement service as part of their severance agreement. This is a great start to help you retool your resume, get career counseling and figure out what you want to do next.
For laid-off employees who don’t have complimentary access to a job coach or placement service, the first step will be to update your resume for a new job in your field or a completely different career path.
Once you’re armed with a typo-free resume, the next step will be to set a minimum goal for how many applications you want to submit every day, week and month (this will ensure you don’t fall into a rut waiting for responses to your first batch of applications). On average, the post-layoff job search can last between three to six months.
While it can seem embarrassing to tell others you’re looking for work, networking either in person or on LinkedIn can help you reduce the time it takes to get an interview. Don’t underestimate the power of a referral.
If your entire industry has taken a hit, you may want to consider other fields of work. Make a list of the people in your immediate circle who can help you get connected in another field—using a resource like LinkedIn can help jog your memory and remind you of who you know working in other fields.
Some helpful places to start looking for jobs include general job platforms like Indeed, LinkedIn’s jobs tab or The Org's jobs platform and industry-specific job boards like Dice or Built In. For jobs at specific companies, you can typically follow their HR team on Twitter to get the scoop on the latest jobs or even search for a company on The Org and click on their jobs tab.
Also, be sure to sign up for The Org’s free weekly Work in Progress newsletter for helpful tips and information that can aid you in your job hunt.
Show off your great team with a public org chart. Build a culture of recognition, get more exposure, attract new customers, and highlight existing talent to attract more great talent. Click here to get started for free today.