How to Survive a Layoff-updated for 2025, with warning signs

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Photo credit: Ron Lach

I’ve been laid off more than once. Layoffs are never fun but they are common, especially in industries like tech, business services, hospitality, and construction. According to data from the Bureau of Labor Statistics, 40% of Americans are likely to be laid off at least once during their working years. And we are heading toward the months when people are most likely to be laid off—December and January. Getting laid off sucks, aside from the opportunity to sleep in a bit later. But it is manageable.

Common warning signals

Most companies, other than the federal government, don’t announce a layoff in advance. However, there are often warning signs. Some indications that you might want to start updating your resume include:

• Your company has been losing money

• Budgets are being cut

• Your company was part of a recent merger or acquisition

• The word ‘restructuring’ is getting thrown around a lot

• There seem to be a lot of new independent contractors getting hired

• Upper management is leaving and not being replaced

• A consultant is asking a lot of questions about what you do, a la Office Space

• Your manager is more stressed or less communicative than usual

• Your department is not getting any new projects

• You are not being included in meetings about existing projects

• You were recently hired, over 50, or both—new hires are often laid off before more established employees and older workers are perceived as more expensive (they are not, but age discrimination is hard to prove).

One of these alone doesn’t mean you should start slowly bringing your personal items back home, but several together are concerning.

So, let’s say the worst has come to pass and there’s an unexpected email from your manager inviting you to a zoom call outside your regularly scheduled team meeting. Here are a few things you can do to manage the financial side of things over the next few weeks and months.

Find out what employer benefits are available to you

You may be offered a severance package, which is based on your salary and length of employment. There can be some room for negotiation—for example, remaining as an independent contractor for some period while you look for another job or line up additional paying clients. Some companies offer outplacement services, where you work with an outside company to review your resume and practice interviewing skills. Take advantage of any services offered.

Being laid off qualifies you for COBRA to extend your health insurance benefits. Compare costs though. Getting insurance through the marketplace this year may be not be any less expensive, thanks to our current administration. Consider Medicaid and CHIP, the Children’s Health Insurance Program, too, also assuming Republicans haven’t gutted these.

Get familiar with your state’s Unemployment Benefits website

You can look it up here.

All states offer benefits ranging from 13 to 26 weeks, and requirements to qualify and percentage of salary replaced will vary too. Getting severance pay does not disqualify you, btw. Some states are more generous than others and you may qualify for benefits even if you were fired (as long as it wasn’t for doing something illegal). You can often estimate what your weekly benefit amount will be, which can help with creating your new temporary spending plan. Set up direct deposit into your checking account if you can. And many states’ websites offer additional job hunting resources and/or job retraining programs.

Be aware that it can take several weeks for unemployment insurance (UI) payments to start making their way into your checking account. Income from UI is also considered income for tax purposes, but you can choose whether or not to have taxes withheld. Not withholding puts more money in your pocket now; you can think about taxes and consider making an estimated payment once you get your next job.

Review your current financial situation and spending

Look at your expenses—is there anything you can cut back on or bills you can postpone paying? Total up your essential, bare bones expenses. How much does it cost you to just keep the lights on every month? Subtract this number from your monthly UI income. Yay for you if you get a positive number. If not, keep reading.

• Don’t be afraid to tap your emergency fund if you have one. This is exactly what it’s for. And it’s ok to spend a little on an occasional treat even while you’re cutting back. We all need hyacinths to feed our soul. Especially now.

• Housing is the single biggest line item in most people’s monthly spend. If you can, consider getting a roommate to defray that expense. If you have a mortgage, contact your lender to see if you can modify payments.

• Your grocery budget can be extended by shopping at your local food bank. You may also qualify for programs like SNAP, TANF, and WIC (again, assuming these programs continue to exist). Be prepared to document your income and expenses. Once you get your next job, consider donating or volunteering.

• Check out 211.org and benefits.gov to see what resources are available in your area.

• Utility companies often have programs to help people spread out or reduce payments.

• If you have credit card debt, contact those companies and ask what they can do for you, like reducing the minimum or pausing payments. At the very least, do make minimum payments on time. Depending on your situation, consider paying off any cards with small amounts of debt—this can also help raise your credit score in case you need to tap other sources of credit. If you expect your job search will take some time, consider consolidating any consumer debt with a personal loan or 0% balance transfer, to reduce multiple monthly payments into one that is lower. This is a temporary solution while you line up another paying job. Once you do, prioritize paying off any remaining credit card debt.

• If push comes to shove, prioritize which bills to pay. Pay expenses like housing and car payments first. An overdue credit card bill is better than losing your home or having your car repossessed.

Look for other ways to raise cash while you are looking for your next job

You might already be doing some of these as additional income. Sell stuff you don’t use or are ready to let go of. Create your own temp job by providing childcare for friends and neighbors, or pet sitting/house sitting. If it won’t cost a lot, start that side hustle you’ve thought about.

Here’s the one I’ve considered, Hats for Cats LLC. It will be a robust market because people are already doing this on Etsy.

If looks could kill. No way would my cat let me do this to him.

And consider seasonal temp work, like retail around the holidays and garden centers in the spring/summer. You don’t need to put it on your resume. If you have accounting, marketing, customer service, or admin skills you can document, temp agencies like Robert Half provide both temp and temp to permanent positions, so you can try out the company before you decide to accept an offer.

Start shopping for your next position

Not to get all silver lining-y, but sometimes losing a job can turn out to be the springboard to something better—better compensation, better work-life balance, or just a better fit with your skills, talents, and people you enjoy being around for 8 hours a day. A job doesn’t have to be your sole source of existential meaning and purpose in life. It’s ok if it just pays the bills and underwrites the other things you enjoy doing outside of work.

Know your worth—you are more than your job title. If you do need to take a job just for the paycheck, you can still keep looking around. Nobody is going to give you the side-eye if you work someplace for less than a year. If you’ve been considering changing careers, focus on your transferable skills, and be prepared to give examples. Volunteering for a short period can also be a good way to beef up your resume in a new field and shows that you can do the work. It’s also a great way to get out of the house, be social with other people, and expand your network. Plus, unlike enrolling in graduate school, you won’t have to take out a serious loan to afford it.

And while you personally may not be concerned right now about a layoff…

Maintain situational awareness. Whether or not you think a layoff is in your future, it’s always a good idea to keep your resume and profile on job sites updated. Maintain your networks—in addition to LinkedIn, don’t forget about any alumni or professional networks you might be part of. Having someone on the inside who knows you and can recommend you because they know you or previously worked with you is definitely a plus when applying for a new position, in any size company. Professional associations often have job boards for members. Changing jobs is one of the best ways to immediately increase your income—it’s often much much easier than trying to negotiate a raise in your current job.

Economic policies in the US since the 1980s have increased wealth inequality, resulting in 99% percent of of us living in an ever more precarious world. The median annual income in 2024 is about $75,000, with 65% of Americans reporting that they live paycheck to paycheck. I’m guessing these numbers are even higher in 2025.

Among those earning over $100,000 a year, more than half live paycheck to paycheck. You may not be looking around for your next position yet, but don’t assume you’ll always have the same job you do now. While we are working to change an extractive system designed to funnel money away from working people and into the pockets of smarmy billionaires, take the steps you can to improve your financial situation.

Here’s one of the most important: for the love of goddesses, if you don’t already have an emergency fund, please please please open an online high yield savings account and start saving, even if you only have a few dollars to start it with. This is your shit-has-hit-the-fan money that is separate from money for short term or longer term goals. It’s for major hits to your income, like a job loss or a serious health or family emergency. This money buys you time and peace of mind so you can focus on dealing with the emergency without adding financial stress into the mix.

Set up an automatic transfer from checking to savings every pay period. As little as $20 a pay period adds up faster than you think. You can jumpstart it with part of a tax refund or other windfall, too. While it may not be as exciting as a winning scratch-off ticket, having $250 to $500 in a savings account can help you avoid putting an unexpected expense on a credit card. Whenever you can, build your buffer.

Bankrate.com always has a current list of savings banks with the highest interest rate; I like Ally Bank’s account because their user interface lets me create buckets within my account for specific purposes, like car insurance, vacations, and medical expenses for my cat. If that idea appeals to you, you can use this referral code to get both of us a bonus should you decide to open an account with them before December 31, 2025. I normally don’t do affiliate links, and I’m making an exception here because Ally will add $100 to your new account (see the terms and conditions here).

Be open to new possibilities and remember that while you might love your job, your job will never love you back. Strategize accordingly. And while you’re looking for your next role—if your interviewer tells you that this isn’t just a company, it’s a family, run.