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More jobs could wind up on the chopping block this year.
Image source: Getty Images
The scary thing about job layoffs is that they can sometimes arise out of the blue, leaving workers scrambling to figure out their next move. The good news is that the national unemployment rate is not only low right now, but also the lowest it’s been in 20 years. That’s certainly an encouraging data point.
On the other hand, a number of well-known companies have already announced plans to reduce their staff. That’s something financial guru Suze Orman talked about on a recent podcast episode, where she also warned workers to gear up for a period of general economic decline.
Now, it’s important to recognize that recent layoff news has largely been concentrated in the tech sector. That sector ramped up on hiring during the pandemic, and is now backtracking.
But still, Orman is right to warn workers that layoffs are already starting, despite a low unemployment rate. And it’s a good idea for everyone to prepare for them. Here’s how.
1. Know the signs
In some cases, layoffs can really come from out of nowhere. But often, there are warning signs, albeit subtle ones.
If your employer has started to pull the plug on things like workplace benefits and new projects, it’s a sign your company may be trying to conserve cash. And it may be doing so because revenue has dropped. If that’s the case, layoffs could be right around the corner.
2. Shore up your savings
When you lose a job through no fault of your own, you’re generally entitled to collect unemployment benefits. But those might only replace a small portion of your income, depending on what state you live in and how much you earn.
That’s why it’s so important to boost your savings account balance. The more money you have on hand in the bank, the more options you’ll have for continuing to pay your living expenses while you look for work in the event of a layoff.
A more robust savings account balance could also spare you from having to take a job you don’t want after losing one you liked. Without savings (or without a lot of savings), you might rush to accept the first job offer you get so you have a way to cover your living costs without incurring debt. But if you have a larger cushion, you might buy yourself the option to take your time and find a replacement job that’s a much better fit.
3. Start networking and boosting relationships
The more people you know within your company and industry, the easier it might be to either avoid unemployment or get a new job if yours lands on the chopping block. Say you get to know managers across different teams at your current company. If layoffs hit your department, another manager might be able to find you a role on their team.
What’s more, perhaps your company is forced to implement layoffs, but a competitor is thriving and has positions available. If you get in touch with the people you met at that company at a conference a couple of years back, they might think of you as openings pop up — and they may be more than happy to submit your resume if you’re forced to proactively apply for a job there.
Just because there’s been a recent string of tech layoffs doesn’t mean there’s a reason to panic. But it certainly wouldn’t hurt to prepare for layoffs in case broad economic conditions decline and more companies are forced to let workers go.
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