Layoffs: The New Normal in Today’s Job Market
By Dara Kushner
With so much turbulence in the U.S. economy stemming from the Covid-19 pandemic, layoffs have unfortunately become commonplace in recent months. Businesses are resorting to layoffs due to financial difficulties, industry or market changes, shifts in company strategy or direction, mergers/acquisitions, and over-hiring. Layoffs are often used as cost-cutting measures and can result in serious financial hardship for affected employees, as well as impact the overall functioning of a company
There is a notable difference between being fired, which is the result of an individual’s performance or actions, and being laid off, which is the termination of employment of an employee or multiple employees in response to economic conditions. While layoffs can happen to anyone and are a common experience in today’s job market, you might be left shell-shocked and unsure of what to do next if it happens to you. Being laid off is not just difficult for your finances and stability, it can also take a toll on your mental health.
Being laid off is the termination of employment in response to economic conditions instead of performance.
With mass layoffs cutting across multiple industries, it is reasonable to be concerned and have a game plan should your employer pull the trigger. How do you deal with it mentally and emotionally? What financial and personal tasks should you work out right away? How do you navigate the job search? Where do you go next? There are a series of steps to take if you have just been laid off, including:
Self Care - take some ‘me’ time to process everything, treat yourself to a trip or something that will give you joy.
File for unemployment immediately.
Request a letter in writing from your HR department.
Get everything due to you & try to figure out your severance package (benefits, bonuses, PTO, stock options), and get any discrepancies or loose ends squared away.
Figure out your health insurance options if you were covered by your employer.
Share the news with your friends and professional network.
Reassess what you want to do personally and professionally.
Redo your resume and LinkedIn profile.
Start the job search with an open mind, and keep it targeted while researching companies that align with what you want in your next job.
Stats and Which Industries are Most Affected
Layoffs at major tech, media, and finance companies throughout 2022 and into 2023 are dominating headlines despite a resilient job market and low unemployment rate. Some of the highest numbers are among giants such as Amazon (18,000), Google/Alphabet (12,000), Meta (11,000), Microsoft (10,000), Salesforce (8000), Disney (7000), Goldman Sachs (3200), and Morgan Stanley (1600).
With 154,000 layoffs in 2022, tech companies, in particular, are experiencing the most layoffs after aggressively hiring during the pandemic and then facing waning demand for digital services and weaker revenue after Covid-19 restrictions ended and people returned to their normal lives.
As business growth is slowing and labor costs are increasing, 2023 is already seeing the headcount slashing continue as businesses do a reset after growing rapidly in the early days of the pandemic. In addition, high-profile layoffs across tech have spilled over into other industries such as finance (Goldman Sachs, Morgan Stanley, Wells Fargo), media & publishing (CNN, BuzzFeed, Gannett, AMC, Callisto Media, Harper Collins), real estate (Re/Max, Compass) and even retail (Gap, H&M, 7- Eleven).
You should have a plan on what to do if you get laid off, including how to begin the job search.
During normal times January is historically the busiest month for layoffs because companies are doing restructures, reorganizations, and setting their direction. But throw in the Covid-19 pandemic we are coming out of along with a shaky economy, rising inflation, and overall looming recession fears, and most companies are remaining skittish, all of which makes it seem like the perfect storm for layoffs to continue in the wrong direction for 2023.
According to a Resume Builder survey of 1,000 business leaders in December, one in three companies expects to lay off 30% or more of their workforce in 2023. Predicting layoffs can be difficult, as companies may not always provide clear indications that they are planning to reduce their workforce. However, some signs could indicate layoffs are imminent, such as:
Financial difficulties: If a company is experiencing financial difficulties, it may be more likely to lay off employees as a way to cut costs.
Management changes: A change in company leadership might lead to making changes to the workforce as part of the new direction/plan for the company’s future.
Decrease in demand for the company’s product or services: If the products or services are no longer in demand, laying off employees to reduce costs and stay afloat might be the only option.
Mergers or acquisitions: There may be redundancies in the workforce when companies merge or acquire one another, leading to layoffs.
Budget or Project Reductions: A company may decide to lay off employees if it is cutting back on a particular budget or project.
It is important to note that these signs do not always indicate that layoffs are inevitable, and many companies may take steps to avoid layoffs if possible.
Dealing with the Emotional Toll of a Layoff and Bouncing Back
Layoffs are an emotional experience. For most of us, a job is not just about getting a paycheck, it is part of our identity, so when that job gets taken away, our self-worth can be affected. Job loss is a form of grief and should be handled as such. Self-care is the most critical first step after a layoff. Treat yourself to something special. Ask yourself what hobbies or activities make you feel good, and then use that extra time you now have to do them and cut back on stressful activities.
Remind yourself how far you have come, the accomplishments you have experienced, and that this is not your fault. The stages of grief - denial, anger, bargaining, and acceptance - might set in, and being cognizant and figuring out how to navigate them is key.
Losing a job is devastating, and it might take a while before you want to tell your family, friends, and professional network. You have most likely seen a lot of LinkedIn posts in your feed recently about your professional network’s layoffs - this is because announcing your layoff might be one of the fastest ways to find your next job.
Aside from your network being able to potentially direct you to an open role or a hiring manager looking for your skills, recruiters are also specifically searching for candidates with these posts to see how people handle themselves (remain respectful to the company that laid you off so your sense of character can come across just as clearly as your skills and title).
Financial challenges, management changes, and decreased demand are some factors leading to lay offs.
Navigating the Job Hunt After a Layoff
The longer someone is unemployed, the more their mental health can decline, so it is vital to start the job hunt sooner than later. How do you jump back into the job search after a layoff? Take a pause after the initial shock of being laid off and figure out your goals and priorities.
One way to do this is to ask yourself what you did and did not like about your previous role and what you want and need in your next one. After determining this, you will be able to job hunt and network more effectively. Navigating a job search in today’s job market can seem like an obstacle course, but there are some ways to make the process easier, such as:
Assessment: Determine and prioritize your skills, experience, and qualifications and figure out how they align with different jobs and industries.
Pick a Path: When reassessing your career, consider your personal and professional goals and decide if you should switch career paths altogether or pick up where you left off.
Update Your LinkedIn Profile and Resume: Ensure all are up-to-date, clearly written, and highlight relevant skills and experience. An optimized LinkedIn profile will illustrate your strengths and value to potential employers and allow recruiters to easily find it and approach you.
Networking: Make it known that you are looking for a new job, and reach out to your professional network privately and via social media.
Recruiters: Whether you have an entry-level or executive-level background, partner with a trusted search firm in your field.
Job Search: Look for roles that match your skills and qualifications on job boards and company websites. Try to find job opportunities where you are above 75% job match. Evaluate the market and keep your search as targeted as possible. Do additional research into recent layoffs as well as look at sites like Glassdoor to learn more about company culture and reviews.
Tailor Job Applications: Tweak your resume and your cover letter for each application for the specific role and company you are applying to.
Classes and Certifications: Invest in your skills and expertise - when hiring managers and your network know or appreciate what you do they are likely to recommend you to their network.
Prepare for Interviews: Research the company and the position and practice common interview questions. Also, be prepared to address your layoff with a simple and neutral response.
It is important to keep yourself focused and calm while preparing yourself for the biggest pitfall of job hunting: rejection. It is part of the process, however, try to think of it as a step toward the perfect opportunity rather than another failure.
Begin the job search as soon as possible after being laid off. Start by deciding career goals and updating your resume.
Addressing the Layoff
One silver lining of the pandemic is that potential employers are more understanding of resume gaps & layoffs on a resume, and it is less of a social stigma, so this is a chance to demonstrate you can handle adversity. You were laid off, not fired, it has nothing to do with your performance.
What is the best way to explain a layoff to a potential employer? Be prepared to answer questions about it professionally and confidently, and keep it short and sweet. Be upfront about the circumstances of your layoff and show that you take responsibility for your job search and career development. Explain that you were laid off as a result of a company-wide reduction in the workforce, financial difficulties, or changes in the business, and quantify it by sharing how many people were unexpectedly laid off, including you.
Focus on the positives, emphasize your skills, include metrics, highlight your accomplishments (particularly the most recent ones), and explain how you contributed to your previous company and what you can bring to a new employer. Show that you have been productive and proactive during your time out of work and fill in the blanks of what you have been doing (looking for new job opportunities, taking a course, or volunteering). Maintain a positive attitude throughout the conversation focusing on the future rather than dwelling on the past and finger-pointing.
Another concern might be navigating the job search while there are so many layoffs occurring. Trying to find a job while others are losing theirs might seem challenging and might not instill confidence or a sense of security in the job market either. If it seems temporarily difficult to find a job in your field, it might be a good idea to brush up on your skills and take a bridge job in the meantime. Health care, food/ beverage, education, legal services, banking, and even tech (despite the aforementioned stats) are some of the industries hiring more consistently than others.
The Takeaway
Being laid off is the result of a company letting go of employees due to circumstances outside of their control and roles (quite often entire departments) being eliminated. There is no definitive way to predict where the next layoffs will be, but in this economically shaky climate, it is a good idea to be prepared for a job search even before you need to do a job search.
Should you experience a layoff, make sure to take time to mentally process it and do things that make you feel good. Get your paperwork ducks in a row, update your resume, craft an explanation to address the layoff, and evaluate and reprioritize where your goals (both personally and professionally) lie to determine what career path will allow you to be and do your best.
Being laid off is not a reflection of your abilities or work ethic, and you are not alone. Ultimately, do not think of a layoff as a setback, think of it as a fresh start and how many great opportunities might be awaiting you.