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January is historically the busiest month for job cuts.
The first month of the year “That’s when most companies are restructuring, reorganizing and setting direction,” says Sarah Rodehorst, co-founder of Onwards HR, which helps companies carry out layoffs, adding that technology, health care, banking and finance experience the biggest cuts in 2023.
Goldman Sachs CEO David Solomon already announced widespread layoffs at the investment bank in the first half of January, citing slowing economic activity.
After a year of rising inflation and a series of large interest rate hikes, businesses are spooked by the possibility of a looming recession. One in 3 companies expect to lay off 30% or more of their workforce by 2023, according to a December survey of 1,000 business leaders by Resume Builder.
The reductions so far have affected all industries. Morgan Stanley, Amazon, Netflix, Cisco, CNN and dozens of other companies have laid off staff this year. Meta, Facebook’s parent company, reduced its workforce by 13%. Despite these cuts, the the labor market remains resilient, as US employers have been steadily adding more jobs than workers to fill them. But that dynamic may change in 2023.
In December, Fed officials predicted the the unemployment rate would reach 4.6% at the end of 2023, compared to 3.7% in November.
While it is still historically low, it is a rebound that would nonetheless affect hundreds of thousands of workers.
So what should you do if they let you go? Here are some tips:
Share the news far and wide
Losing a job can be devastating, and it may take a while before you’re ready to tell your friends, family, or people in your professional network, let alone the world. But sharing the news far and wide on social media can go a long way to seize the next opportunity.
“One of the things we’re finding is that one of the fastest ways to find your next job is to post that you’ve just been fired by a well-known company and they’re looking for your skills,” says Onwards HR’s Rodehorst. “We’ve talked to recruiters and they’re looking specifically at the people who are doing those jobs and especially how they handle and present themselves in those jobs. If they’re respectful of the company that may have fired them, that just shows a sense of character.”
Apply for unemployment as soon as possible
Apply for unemployment right away because it can take a few weeks to start receiving benefits after you file a claim.
56% of Americans can’t cover an unexpected $1,000 bill with their savings, according to Bankrate, and if the job search drags on, unemployment benefits will help keep you afloat.
Benefits vary from state to state. You will need to check with your state unemployment office to determine eligibility. Here it is a list of contacts by state.
Ask your creditors for a break, however brief
If you are at risk of being fired, trying to pay off your debt should take a backseat.
“You actually want to delay paying your debt or pause it so you can save cash because in a layoff, cash is king,” says Michelle Singletary, Washington Post personal finance columnist. “Make the minimum payments, but you want to prepare for the possibility that those payments may have to stop while you focus on needs.”
To avoid high interest rates or fees or a drop in your credit score from late payments, it is essential to call your lenders to explain your situation.
“One thing a lot of people don’t do, which is really amazing and I hear it from lenders, is they don’t call. They’re embarrassed,” Singletary says. “Most of the time, the lender will work with you. They may be able to make a partial payment on a home loan.”
Did you get a 401(k) loan?
It’s not uncommon for workers to borrow money from their 401(k) accounts to help cover a major expense, like a down payment on a house or college tuition, and then pay it back themselves, plus interest, over time. . But those terms often depend on keeping your job.
“You want to ask how the loan will be treated when you get laid off,” says Tammy Lally, a financial planner and financial adviser. “Some employers will give you a grace period to pay off the balance. And then after that time, if the balance isn’t paid, it will be treated as a withdrawal and taxed in full.”
Schedule those medical appointments as soon as possible.
If you lose your job, you’ll also lose the health insurance that came with it, so it’s important to schedule those doctor appointments you’ve been putting off if you feel like a layoff is just around the corner.
“Some employers will subsidize your health care for a certain period of time, and some will stop subsidizing you on your last day of work,” Lally says. “You may also be offered COBRA, which is just a continuation of your care, and you’ll want to look at healthcare.gov to compare it to other plans on the market.”
give yourself some slack
For better or worse, our identities are often tied to our work. Losing it suddenly, along with the meaning, purpose, or structure it offered, can be like losing a part of yourself.
“We should allow people to mourn the loss of their job,” says Singletary. “There are organizations where you can go online and get free counseling, and when you lose your job, your insurance may not cancel right away and you may want to see if you can get an appointment with a mental health provider.”
Throughout this process, a key figure should offer some comfort, says Rodehorst.
“According to the US Bureau of Labor Statistics, 66% of workers find a new job in less than 15 weeks.”