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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.
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Sanjib: Like you I too was born in India, in Kerala to be precise. I had Bachelors and Masters degree in Structural engineering. I came to the US in 1969 as a Ph.D. student at Lehigh University in Betlehem, Pa. After Ph.D. I was working in an international company in NJ. I am in the early eighties now. I retired almost 25 tears ago and I was concentrating on investment. I am well off now. I have heard that many tech companies are laying off people perhaps because the Fed is increasing interest rates to fight inflation. I was occasionally worried about being laid off. But I was lucky that I was not laid off. You are probably much better off than me. So take courage and things will be okay.
Thank you for sharing your experience, TVN. Most tech companies over-hired in the last couple of years in anticipation of continued growth, but the fear of a slowdown and recession changed the equation. That’s why so many tech companies are reducing their workforce in recent months. Your advice (“..take courage and things will be okay..“) is spot-on.
Do you stay out of a car because you fear an accident? Do you avoid big cities because you are worried about being mugged? Life challenges you with the risk of negative events all the time and dares you to soldier on. A layoff, or a firing, or a forced resignation, or even being a zombie in place (having a job with nothing worthwhile to do) all take their toll on your psyche. But thousands of people deal with these things every day, and most of them are probably pretty nice people. Have faith in your abilities, and if a job loss comes, don’t get mad or depressed or frozen in place. Mourn for a day, then count what blessings you do have, and look for the next gig. As the song says, “Look on the Sunny Side of Life.”
Thank you for your thoughtful note, Martin.
Unless you are a lawyer, a doctor, or an electrician, working in a corporate world will put you at risk to a layoff as the economy contracts. In college, I read Sun Tzu’s The Art of War and Machiavelli’s The Prince. The insights from those books are valuable to survive in the US’ Darwinian corporate world.
Thanks, neyugn. Self-employment is probably the only path that doesn’t have the risk of layoff.
A layoff is simply that moment when employer flips from long-term investor in talent to day trader, it’s not a reflection on you, your abilities, and certainly not your value as a person. I’d stay as long as you like or are able; if you leave on their terms, you walk out with a big pile of severance cabbage for your retirement portfolio.
Thanks for your note, David. The long-term investor vs day-trader analogy is very appropriate.
Benefits to an employment change:
Better challenges are ahead, if you stay in your field with a different employer. Surely you’ll have multiple offers, your field is hot!
New professional friendships.
The ability to share your wisdom with new ears to listen to it!
More years to have earnings on your social security record.
*****************************
Benefits to having a sabbatical, if employment doesn’t occur quickly:
Reconnect with friends & family
House projects get completed
More walks in the woods, more swims in a pool
Travel to your most highly-ranked sites.
Volunteer! Teach at a community college!
Get a pet!
You’re saving federal taxes! 🙂
Wishing you a peaceful path forward. All will be ok. Share your talents in other ways, your feeling of value will only increase.
Thanks for your insightful notes, Stacey.
Sanjib, sounds like your “gradual retirement” has been very successful and you can weather any possible layoff in good stead. And as for any emotional fallout, I’d simply say–the loss is theirs.
Thanks, Andrew. Yes, the gradual retirement has been working much better than I expected. Amongst other things, it also added extra cushion to my finance such that I can weather unexpected loss of earned income.
If you quit you won’t qualify for unemployment benefits and continuing medical coverage. If you’re laid off you will qualify.
Thanks, David. That, and a few other benefits too. This is what my friends pointed out.
I was laid off once and it’s as you say, a nasty blow to self-esteem.. though the reasons were structural (department moving to Switzerland), I still felt it.
Definitely don’t resign, wait and see.. at worst the package will be better financially than just leaving.
Ideally start looking for consulting/contracting opportunities now. I need to do the same thing, but I haven’t had the hustle mindset for some years now, it’s not easy..
Thanks, Doug. I still don’t know how I’d take it if I’m hit. Just hoping that it doesn’t happen.
Before I retired from my engineering career, I’d been laid off enough times to know that I wouldn’t quit to avoid one. If for nothing else, stay for the severance and any stock you’re due.
Thanks for sharing your experience, Randy.
Sanjib, thanks for the thoughtful article. I was laid off twice – once at the very beginning of my career, and at the very end. The first was totally unexpected, but I was young and found a much better job fairly quickly. It set me up for a great career. The last time I knew it was coming. it had been expected for several years, but we were able to extend our contract for an extra year or two. I could have continued working had I chosen to relocate, but that was not in the cards at this point in my life. Even with the advanced notice I didn’t really prepare for the end. It looks like you are in a better place should the worst happen.
Thanks, Rick. Yes, if the worst happens, it won’t affect me that much in terms of financial preparedness, but the stigma is bothersome.
There is no stigma attached to layoffs. It is business conditions of many descriptions that force companies to adapt to a changing world. What stings is observing the top dogs getting big bonuses for their awesome cost cutting efforts.
Thank you, Chazooo. I can imagine that it must be quite hard for most people who have to take the decision of laying off their employees. I’m glad that my job doesn’t put me in a such a difficult position to take layoff decisions.
Sanjib, I’m sorry you are facing the uncertainty of a layoff. I supported a friend who aged out of his profession a few years ago, and I faced something similar to yours a few years before that. In each case, I think the loss of control was the most unsettling aspect of the situation. It was helpful to sit down and start considering options for employment elsewhere, to reverse the flow of thought. Meanwhile, I think you are right to sit tight. If the worst does happen, I suspect the bad taste will fade with time.
Thanks, Edmund. Perhaps I’m overthinking it and am unable to accept the possibility of a layoff as an occupational hazard of my current job.