What to Do When You Get Laid Off: Understanding Your Next Steps

Losing a job is an emotional and overwhelming experience — your competence is questioned and you’ve lost some financial security. It can be especially stressful if you’ve been laid off since the job loss is likely no fault of your own.

But what you do when you get laid off determines your job prospects moving forward. While this layoff might be a setback, you can choose to learn from the experience to gain personal and professional growth. 

When you get laid off, you lose your job because your employer can’t afford to pay you or no longer requires your services. But you’re not let go because you’ve done anything wrong. That’s why being laid off isn’t the same as being fired. When you’re fired, it’s because of your performance or larger issues like insubordination or absenteeism. 

A company might need to lay off employees because they’re restructuring, shifting markets, or handling economic factors like a recession. Regardless of the circumstances behind your layoff, you may be entitled to compensation such as unemployment benefits, healthcare subsidies, and a severance package. 

Should these circumstances change, your old employer may offer you your job back, but they’re not legally required to do so.

What to ask your employer when you’re laid off

To ensure you gain as many layoff benefits as possible and set yourself up for success moving forward, ask your employer these questions:

• When can I expect to receive my last paycheck?
• Will I be compensated for my unused paid time off or sick leave? 
• Can I expect severance pay?
• What will happen to my 401(k) / pension plan?
• Will I have health insurance coverage after my last day of work?
• Will you provide a reference for me?
• Can I have copies of my performance reviews?
• How long do I have to access projects I’m working on (like a portfolio)?

For layoffs, it depends on your position and location. If you work for a business that meets the Worker Adjustment and Retraining Notification (WARN) Act’s criteria and lose your job through a plant closing or mass layoff event, your employer must provide at least 60 days’ notice or more, depending on state law.

But there are exceptions. For example, you can be laid off without warning due to natural disasters or a faltering business. 

If your employer supplied health insurance as part of your benefits package, you could choose to remain on the plan temporarily through COBRA continuation coverage. If not, you can apply for coverage from a private insurer or a government health care provider.

Losing coverage because of a layoff counts as a qualifying life event, meaning you can enroll in health insurance outside the typical enrollment period. This also means you might be able to join your spouse’s coverage.

6. Determine the details of your final paycheck 

Depending on your termination agreement, you may receive your final pay immediately. Double-check the amount and deductions for any errors. If you’re part of a mass layoff subject to the WARN Act, you may be entitled to 60 days’ notice before termination.

During this period, the employer must continue to pay your wages and benefits, giving you some financial cushioning while job hunting.

7. Request a letter of recommendation 

While ties are still strong, ask for a reference letter from your manager to give potential employers an accurate profile of your employee strengths, transferable skills, and performance. 

8. File for unemployment benefits 

While requirements vary between states, you may qualify for unemployment benefits. Receiving them takes time, so inquire about these benefits as soon as possible to avoid long breaks in income.

9. Adjust your budget 

To try and maintain financial wellness throughout this transition, take stock of your personal finances to gain an accurate picture of all necessary expenses and non-essential items. Then, create a budget that should keep you afloat between jobs.

After some self-care and journaling, you’re prepared to begin the ever-daunting job search. Here are a few tips to help you find a new position:

1. Update your resume: Include your most recent work experience and any new skills, certifications, or qualifications you acquired with your previous employer. And don’t forget to update your LinkedIn profile — you’ll need it to tap into your professional network and connect with other industry professionals.

   If recruiters ask about your previous position, knowing what to say when you get laid off can be challenging. But it’s best to be transparent since this information will likely come to light, and you don’t want a hiring manager questioning your honesty.

2. Find upskilling opportunities: Use this limbo period strategically by improving your skills. Choose something that boosts your resume while making you feel better prepared for a new role. 
3. Start networking: Studies show that 70–85% of job hunters land roles thanks to networking. This includes chatting with loved ones and friends, cold-connecting with ex-coworkers on LinkedIn, and attending events. Do whatever you’re capable of because the more you reach out, the more likely someone will think of you when a great role opens up. 
4. Create a daily routine: Unemployment can force you out of your routine, making you feel less inspired. Stay motivated to find a new job by sticking to your regular routine as much as possible, be it meal planning, exercise, or mental health habits like meditation. 
5. Build a vision board: This career break isn’t necessarily bad, as it gives you a moment to reevaluate your priorities. To aid this reflection, try creating a vision board illustrating your goals, putting it somewhere you look every day to remind you of what you’re working toward. 
6. Schedule your job search: To keep yourself motivated and add purpose and structure to your days, schedule job hunting like you would work. This also means you’re limiting time spent scrolling job boards to enjoy a much-needed mental break and avoid becoming overwhelmed.