What do these companies have in common?
- Victoria’s Secret
No, they’re not all being purchased by Elon Musk. But, they all have recently announced layoffs.
You may have noticed that most of these companies are from the technology sector, but everything from Slurpee’s to negligees has also been affected. And, despite record job growth in some industries (education, health services, leisure, hospitality), further layoffs in tech and retail can be expected.
- Fast facts on layoffs & terminations
- Laid off vs. furloughed vs. terminated
- What to know about severance packages
- Assessing your financial situation when laid off
- Reducing your chances of being laid off
According to a study of U.S. workers conducted by The Harris Poll and published by INTOO:
- Nearly half of employed Americans (48%) suffer from layoff anxiety.
- Around one-third of those say fear of a pending recession (34%), rumors around the office (32%), and a recent round of layoffs at the workplace (30%) fuels their layoff anxiety.
- Nearly half of employed Americans (47%) say they do not feel prepared for the possibility of being laid off.
- More than half of younger workers (51% of those aged 18-34) and workers who experienced a layoff/termination/joblessness during the Great Recession (55%) feel unprepared for a layoff.
And, if you’ve ever been laid off or terminated, don’t feel alone; 40% of Americans have been laid off or terminated from a job at least once.
There is some confusion between these three terms, primarily because many people who have been terminated say they were laid off, as do people who have been furloughed. Let’s set the record straight.
If you like your job and the boss calls you into the office to tell you there’s been a change in your employment status, hope you’re furloughed. When you’re furloughed, it means you will be coming back in the future. Unfortunately, you won’t be getting paid while you’re on the sidelines.
Many companies, particularly those in technology, furloughed employees during the height of COVID. Employees were given 1-2 weeks off without pay at least once (some companies furloughed employees several times).
If you’ve never been laid off, the chances are extremely good that you know someone who has. Being laid off is when your employer ends your employment because of business factors beyond your control, such as:
- Company relocation
- Business closing
- Cost-cutting measures
- Loss of funding
- Project cancellation
Layoffs are not usually performance related, though someone deemed to be less productive by a company may be more prone to being laid off than someone who frequents the “Employee of the Month” spot in the parking lot.
Terminated is a nice way of saying the F word: fired. If you are fired, your employer has decided you’re guilty of a “terminable offense,” like:
- Poor job performance
- Being under the influence of drugs or alcohol when working
- Committing a crime that violates company standards
- Being excessively late or missing too much work
- Sexual harassment
- And many more transgressions that can be found in your employee handbook
When you’re terminated, you can expect to be paid for the time you already put in during the current pay period, but not beyond that. However, that is at the employer’s discretion.
Some terminated executives receive a pre-arranged “golden parachute,” which may include severance pay, stock options, cash bonuses, or other benefits.
Employees who are laid off typically receive a severance package because the company initiated the termination of employment, not the employee. The elements contained in the severance package are often based on position and length of service.
A severance package may contain benefits such as:
- One to two week’s pay for every year of employment completed with the company
- Payment of the employee's COBRA health insurance premiums for a period of months
- Assistance finding another job
You may receive some severance benefits if you quit your job. But, again, this is at the employer’s discretion.
For example, an employee who leaves for reasons specified in the employee handbook (such as a spouse transferring, or becoming a family caregiver) may receive two weeks’ pay when they provide the company notice that they intend to leave.
Being laid off, particularly when caught off-guard, can be a very stressful life event. Not only is your income impacted, but pretty much your entire life.
In addition to losing a paycheck when you’re laid off, you have to consider replacing your:
- Health insurance (COBRA = very expensive)
- Group disability insurance
- Group life insurance
- Retirement plan (take a distribution, leave it with the employer, or rollover to a new plan)
You also have to ask yourself some tough questions concerning going back to work:
- How long can I afford to stay out of work considering unemployment insurance, my emergency fund, my lifestyle, etc.?
- Do I want to find a similar position or start down a new career path?
- Am I physically, mentally, and emotionally ready to interview and start a new job?
While there is absolutely nothing you could have done to prevent being laid off in most circumstances (i.e., the company is closing or moving the office to Bora Bora), there may be a few adjustments you can make that can save you from being laid off if there’s a chance the axe may not fall on you.
Stephen Viscusi, author of “Bulletproof Your Job: Four Strategies to Ride Out the Tough Times and Come Out on Top at Work,” says the key to staying employed is:
- Be visible, even if it means giving up telecommuting.
- Be easy, even if it means negotiating a reduced salary.
- Be useful, even if it means volunteering for assignments no one else wants.
- Be ready to jump ship if opportunities outside your company become available.
And, don’t be humble. Promoting your accomplishments and highlighting the value of the work and service you’ve performed for the company is not shameful self-promotion. It’s good business and a smart way to reinforce your importance.
You never know — it may be the difference maker when your boss is going down the employee roster and deciding who to keep and who to cut.
The information and content provided herein is for educational purposes only, and should not be considered legal, tax, investment, or financial advice, recommendation, or endorsement. Breeze does not guarantee the accuracy, completeness, reliability or usefulness of any testimonials, opinions, advice, product or service offers, or other information provided here by third parties. Individuals are encouraged to seek advice from their own tax or legal counsel.