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A Job Loss Action Plan

Our current business cycle is in a state of flux. Typically, economic business cycles produce layoffs as the economy slows. As of today’s date, however, the economy has been fairly resistant to workforce reduction—with the big exception being the tech industry, which has been punched squarely in the chin with job losses.


It is entirely unknown how long this economy-wide job resilience will last. To that end, Confident Money is dedicated to helping its readers not only survive changing conditions but thrive in the ensuing chaos. Accordingly, you will find action steps below that will help you with whatever the future holds for you.


Why companies lay off employees:

  • Loss of revenue, dwindling funds, the loss of important business contracts and/or rapidly changing economic conditions are all events that can create employee layoffs.

  • A company might decide to relocate to an area they rightly or wrongly view as being more financially advantageous.

  • The company is sold or merges with another company.

  • The company decides it needs to restructure or reorganize itself.

Signs layoffs may be coming in your company:

  • Executives are leaving the company

  • You hear rumors layoffs will occur

  • A spending freeze is put into place

  • The company has been losing money

  • When employees leave they are not being replaced

  • A planned expansion, a project, or new products are being canceled or put on hold

  • You are now out of the loop on meetings and emails

  • Your boss or their boss starts looking for another job

Action steps when you believe you might be laid off next:

  • The very first step is to rework your budget to save more money and increase your emergency fund.

  • Make it a priority to learn any work skills you can quickly become current in.

  • You should begin reconnecting with your network.

  • Make sure you are up to date with new technology in your industry.

  • Begin updating your resume for a possible job search.

  • Update your digital profile and scrub any questionable comments you have made on social media that might bother an employer.

  • You might even start a job search at this point to get ahead of the game. It is always easier to get a job if you are currently employed.

What to do if you are actually laid off or cut from the company:

  • Get a copy of your layoff letter. This is a letter that explains you were let go due to downsizing rather than misconduct or poor performance. You will need this letter to show future potential employers that you were not fired from your last job. This letter is typically included with the paperwork you are given when you are laid off.

  • Ask your employers if you can negotiate the terms of your exit from the company.

  • Get references from your bosses, if possible, to help with your future job searches.

  • Make sure your employer provides you with a COBRA coverage letter. This is super important as you will see below.

  • File for unemployment.

  • If you are married or cohabitating, have a business meeting with your partner to discuss ways to cut costs. Begin by eliminating any unnecessary expenses such as monthly subscriptions.

  • Remember this is a common event that almost all employees experience sooner or later.

Consolidated Omnibus Budget Reconciliation Act of 1986:

One of the benefits of being laid off in this day and time is COBRA. This allows employees who have had their hours reduced or are terminated to continue their health insurance without interruption—typically for up to 18 months. As someone who has been severed from jobs a couple of different times during my lifetime, I know that continuing this coverage is vital to your and your family’s wellbeing.


The rub is the employee has to pay the entire insurance premium, plus a 2% administrative fee to obtain COBRA. This allows your health coverage to continue exactly as it was before. The COBRA letter you are provided should contain the following legal requirements:

  • Deadline in which you must actively select COBRA coverage

  • How to notify the plan administrator to begin COBRA

  • The anticipated date COBRA coverage will begin

  • How much it will cost

  • The due date of your monthly premium and where to send it

Crisis Budget:

Money can easily become a problem without a job. Should things become financially dicey, you can implement a crisis budget as a last resort. A crisis budget is a very different animal than a normal budget. The budget is centered entirely around survival. Spending on anything nonessential is summarily halted until the crisis has passed.


Here are the priorities you pay first in a crisis budget:

  • Rent or mortgage as you don’t want to be both homeless and jobless

  • Water and electricity as you will be evicted if either is shut off.

  • Food is third, simply because there are lots of places to get free or low-cost food like your local food bank

  • Health insurance or your COBRA premiums

  • Transportation such as both car payment AND your auto insurance payments—don’t pay one unless you have enough money to pay both.

  • All other bills are ignored until you are employed again. That doesn’t mean you can’t contact the companies and work something out with them, such as a temporary pause in payments.

~ Larry Faulkner



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