BACK IN 1989, AS I was finishing the final semester of my undergraduate degree in India, I managed to bag two decent job offers. The first was from a government organization in my hometown, and the second was from an out-of-state private company in western India. I had a few weeks to make up my mind.
I was leaning toward the second offer. Not only did the idea of living on my own in a faraway town sound adventurous, but also the private employer’s compensation package was better.
Still, my father suggested the other job. Being a government employee himself, he liked the job security of public sector employment. Frankly, I didn’t think that was important, but I went with the local job anyway because most of my friends were still in town.
A decade and a few jobs later, I moved to the U.S. to work for a multinational software company. I’ve stayed with the firm ever since. My job has always felt safe and secure. But that began to change in recent months, when several tech companies announced plans to downsize.
I got a phone call from an anxious friend who works at my company. My friend and his wife had their first child last November and were busy adjusting to caring for a newborn. He rejoined work when his parental leave was over and heard rumors from his teammates about upcoming layoffs. I didn’t know anything about any layoffs, so I advised him to ignore the rumors, and focus on his family and work.
The rumors, however, grew louder and, over the next few days, started showing up in the media. Soon after, our CEO announced plans to reduce the workforce in the coming months. The anxiety and confusion were now official. Everyone seemed to have the same question: “Am I on the list?”
I pondered what would happen if I was affected. I reflected on Dale Carnegie’s sage advice: There are some things you can’t control. Plan how to deal with them so you can move on. I figure laid-off workers might face five important consequences.
1. Immigration status. Many employers—particularly in the tech industry—hire foreign workers with employment-based visas. Losing a job can jeopardize a foreign worker’s immigration status, potentially forcing the ex-employee to leave the country on short notice. It can be stressful for those workers who fail to find alternative employment in the limited time available. My friend was worried because he’d be in that situation if he lost his job.
2. Financial hardship. Living paycheck to paycheck is surprisingly common, even for dual-income households with fat pay packets. Two out of three Americans worry about how they’d cover even a month’s expenses if their primary source of income stopped. Sudden loss of income is not only a source of stress, but also it’s a slippery slope toward spiraling debt.
3. Career speedbump. A layoff often means resetting our career progress and forcing a new start. While it may open up better opportunities for a few, most take it as a career setback. Having diverse skills and keeping up with industry trends can improve the odds of faster career repair, but the uncertainties and scrambling in the interim aren’t fun.
4. Unwanted relocation. People tend to settle close to their work. Losing a job might mean moving. Relocation is particularly hard for people with deep roots. They might own their home, have a working spouse and school-age children, and be involved in local activities. Moving costs time and money, involves emotional stress and requires many adjustments—some small, some large.
5. Damaged self-esteem. A layoff isn’t the same as being fired for poor performance. I’ve seen highly capable professionals with proven track records get the boot as often as average workers. Still, a layoff comes with the stigma that the person isn’t valued. We enjoy praise for doing good work, and a layoff is the reverse. It’s a reminder that no one is indispensable and, ultimately, we’re on our own.
To be sure, not everyone is affected the same way. Some might be hit by all five consequences listed above and perhaps even a few more. But others may find it’s a blessing in disguise because their lives are improved by the change.
How would I feel if I find myself on the layoff list? Fortunately, my current gradual retirement would minimize most of the financial and logistical challenges. Though I’m still working part-time, it’s for enjoyment and not because I need the paycheck.
Still, I dread the thought of being laid off. Why? It’d surely hurt my pride, evoking a sense of failure and inadequacy. I don’t want my software engineering career to end with a layoff.
This leaves me with the dilemma that I’ve been struggling with for the past few weeks. The only sure way to avoid the situation is to resign preemptively, but that feels extreme. I enjoy my work and took on a new project last year. Quitting would mean leaving behind unfinished work. My career would feel incomplete.
I shared my anxiety with close friends. They all said hanging tight would be more financially sensible. Even if I’m included in a future layoff, the severance package would offer a decent windfall. To deal with the emotional fallout, they gave me the “it’s me, not you” argument. In other words, layoffs often reflect changing business priorities rather than an individual’s incompetence.
I’ve decided to stay put and cross the bridge to retirement only if circumstances take me there. I know that, if I’m laid off, no severance package would be sweet enough to mask the bitter taste in my mouth. But I won’t let it ruin my hard-earned sense of career accomplishment.
Sanjib Saha is a software engineer by profession, but he’s now transitioning to early retirement. Self-taught in investments, he passed the Series 65 licensing exam as a non-industry candidate. Sanjib is passionate about raising financial literacy and enjoys helping others with their finances. Check out his earlier articles.