No matter where you are in the timeline of your career, you’ve likely worked hard to get where you are. If you’ve just entered the workforce and have landed the job you want, you’ve probably worked on building relationships and experience to get you there. If you’ve been with your company for a while, you’ve put in the time and effort that has earned you the position you’re in now.
Which is why, at any stage of a career, it can be a blow when you get laid off.
At the time of this writing, we’re well into 2023 and employees are experiencing downsizing at many levels. Here are just a few examples from Investopedia:
- The tech sector has already experienced a substantial number of job cuts in 2023, with Amazon, Alphabet, Microsoft, Salesforce, Dell, IBM, SAP, Paypall, Wayfair, and Yahoo each reporting workforce reductions. In fact, three of the largest individual rounds of layoffs since the onset of the COVID-19 pandemic having taken place in January.
- Disney announced it plans to cut 7,000 jobs and $5.5 billion in costs as part of a vast restructuring initiative that would see it split into three new divisions: Disney Entertainment, an ESPN division, and a Parks, Experiences and Products unit.
- Multinational investment bank Goldman Sachs has announced it plans to cut 3,200 jobs, or 6% of its workforce, making this one of the biggest rounds of layoffs it has implemented since the financial crisis of 2007–2008.
I’m not bringing up these statistics to depress you – only to make sure you understand that you’re not alone.
When downsizing happens, the first question everyone has is, “How am I going to pay my bills?” I have several clients who have been laid off and, understandably, it has made them extremely scared and anxious. The fear of the unknown often creates heightened stress as they begin to imagine worst-case scenarios due to their newfound lack of financial security.
While the last few years have brought many economic ups and downs, the truth is that downsizing can happen at any time.
- Downsizing may occur during a merger between two companies, or an acquisition of the company by another. If the merger or acquisition has not yet happened, a company might downsize to look like a more viable candidate.
- Other times, a company downsizes when a product or service is cut, or the economy falters.
- Downsizing also occurs when employers want to “streamline” a company – this refers to corporate restructuring in order to increase profit and maximize efficiency. (The Balance Careers)
Knowing this, it’s a big piece of the planning process to plan as well as we can for unexpected events. Here are some things to think about:
Downsizing isn’t even on the radar.
Even if you’re feeling completely secure in your position, it’s important to have a plan in place should something happen. Meeting with an advisor to discuss where you are, and worst-case scenarios can go a long way in giving you some comfort. Don’t wait until you start seeing people pack up their desks before you make a plan.
Your company could be downsizing soon.
If you’re starting to see the writing on the wall, now is the time to take action. This is a critical time to make a list of your assets and liabilities and get an understanding of your household’s monthly expenditures. It’s also the time to take a closer look at your budget to see if there are any unnecessary expenses or loans that might be able to be consolidated or paid off early. A financial advisor, along with your company’s Human Resources Department, can help you understand how your benefits might be maximized and positioned to continue upon your impending separation of service.
Downsizing has already happened.
It’s time to schedule a meeting with your advisor so that you understand what your options are. It’s important to stay organized and know what’s available as far as your company benefits and retirement options. If a new job is already on the horizon, talking to your advisor about making sure any retirement funds are transferred so you keep track of everything is something you’ll want to add to your to-do list.
Aside from the financial stress of being laid off, this is an emotional time as well; it’s important that you utilize all the trusted resources you have available. Don’t panic, take a deep breath, and sit down with a trusted advisor to formulate a plan of action. Ask yourself if you enjoyed your former job and if you would like to stay in that industry. If not, what would you like to be doing? Now is the time to get a fresh start if you choose and to follow your passion, interests, or dreams. If you have a plan and financial confidence, this could end up being the best thing that has ever happened to you.