13 Steps To Preparing for a Layoff

by Gary Foreman

Everyone should be prepared for a layoff, regardless of which industry you work in. These steps will guide you in financially preparing for a layoff from your job.

Below you’ll find a step-by-step process to help you prepare for or survive a layoff. Please don’t just read it quickly and think that you know the topic. It’s important to consider your circumstances and make the necessary changes.

Naturally, we hope that no one suffers a layoff. But we’re also wise enough to recognize that’s not likely. So we offer these steps to help you prepare for a layoff and survive a challenging time.

1. Don’t deny the truth. You could be facing a layoff.

Denying the danger to your income will not make the problem go away. Facing the truth gives you a better chance to be prepared for whatever the future may hold.

2. Make yourself too valuable to lay off.

As companies go through layoffs, those employees that remain need to be capable of handling more than one job. Look for opportunities to learn new tasks at work.

3. Take classes to learn new skills.

Many fields are developing new ways of doing things. Unless you continue your education, you’ll be left behind.

It may mean taking some classes from your professional organization or a trade school. Or you might even need to take some college classes. But you can also find many ways to learn and practice new skills online.

Even if the new skills don’t help you avoid a layoff, they’ll make it easier to find the next job.

4. Evaluate how hard it would be to survive a layoff financially.

Will you be eligible for unemployment? How much would you get and for how long?

You’ll find information regarding the state pages covering unemployment here: How Do I File for Unemployment Insurance?

5. Stockpile non-perishables.

Fill your pantry before a layoff. Having more than a few days worth of non-perishable food on hand is always a good idea. It’s especially helpful if you lose your job.

You’ll find more information about stocking your pantry here.

6. Refuse to take on new debt.

Now is not the time to buy a new car or take an expensive vacation. Even if you could afford the payments today, they’ll become a problem if you lose your paycheck.

7. Pay off debts.

Especially credit card debt. Squeeze your expenses or find new sources of income. Use some of that money to pay down your debts. Check your credit cards to ensure you get the lowest interest rates possible and apply for a lower rate card if necessary. That will make it easier to pay them off.

See The Best Credit Card Debt Repayment Options for Different Credit Scores for more help.

8. Build a savings cushion.

While you do want to pay down some debt, when you’re facing a layoff, building savings can be even more important. Start a savings program now that can help you cover expenses if you end up out of work.

See Finding Money for Emergency Savings. It can help you find extra sources of savings that you might not have considered.

9. Evaluate how hard it will be to find a new job if you’re the victim of a layoff.

Are there employers looking for your skills? Or will you find it necessary to change your career path? Do a little research on multiple job sites.

10. Prepare a resume.

The best time to prepare a resume is before you’re a layoff victim. Here are some tips for writing a job-winning resume.

11. Seek a new job now before you get caught in a layoff.

Use your network to find out about job opportunities. It’s always easier to find a job when you already have one.

12. Look into medical insurance options.

You’ll need to choose what type of medical insurance you need if you lose your job. No one answer is best for all situations.

13. Remember that there is life after a layoff.

Many people even turn a negative into a positive. Take a look at this woman’s story on surviving five years of job losses following the 2008 recession.

A layoff can happen to just about anyone. But preparing for a layoff now can make things much easier later if it does happen to you and your family.

• Adjusting to Sudden Economic Changes
• Easy Ways To Build an Emergency Fund on a Tight Budget
• When Your Employer Cuts Your Pay
• 3 Financial Strategies for the Unemployed
• When You’re Unemployed and Getting Behind on Bills

Reviewed November 2023

About the Author

Gary Foreman is the former owner and editor of The Dollar Stretcher. He's the author of How to Conquer Debt No Matter How Much You Have and has been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money, Credit.com and CreditCards.com.