Bloomberg — It’s happening in big companies like the one run by the Winklevoss twins and the world’s richest man, but also in family businesses across the US: There are more and more layoffs.
That dreaded word had been noticeably absent in the past two years, as pandemic stimulus measures pumped money into the economy and businesses scrambled to hire, which led to the tightest labor market in recent decades.
However, the cracks are beginning to appear. Rising inflation is eating into consumer discretionary income and rising interest rates are spooking the stock market. Although the overall job market still looks strong, US companies last month added the fewest number of jobs since the recovery from the pandemic began. Small businesses were hit especially hard: they lost 91,000 jobs in the month, according to ADP payroll data. Meanwhile, tech companies like Twitter Inc. (TWTR) and Microsoft Corp. (MSFT) are slowing or freezing hiring.
If you’re one of the unlucky ones (or you’re worried that situation is coming) experts say that a crucial first step is to keep your spirits up.
“The first thing to do after a layoff is not to take it personally,” says Maggie Mistal, professional consultant and executive coach based in New York and Florida. “If your self-esteem is affected by a layoff, recruiters and hiring managers will pick up on this and see you as damaged goods.”
Calculate your budget
When you’ve just lost your job, money matters suddenly become more important. First, try to negotiate severance pay, or a larger sum for it.
“Immediately after a termination someone is going to feel guilty about firing an employee, so try to get what you can get at the time,” says Susan Peppercorn, a career coach in Boston.
It also recommends applying for unemployment insurancewhich can usually be done online through state websites.
“You’ve been paying taxes, and part of those taxes have gone into the unemployment system, so you’ve been paying for insurance that helps you at a time like this,” he said.
After a layoff, it’s worth taking a hard look at your daily budget, said Noah Damsky, financial planner at Marina Wealth Advisors. He suggests making cuts in areas like streaming services, gym memberships and dining out.. And only take money out of her pension fund as a last resort, she said, since that is “mortgaging your future to get ahead today.”
When it comes to health insurance, some people have the option to stay in their former employer’s health plan for 18 to 36 months., although you may have to pay for coverage. You can also apply for Medicaid in each state, or join your partner’s or spouse’s insurance, explains Damsky.
take your time
Before, there was a taboo against employment gaps in resumes. But now, with so many people leaving their jobs on the Big Resignation or taking sabbaticals due to exhaustion, that is no longer the case.
“I don’t think emptiness is important,” says Peppercorn. “If a candidate says, ‘I really wanted to take some time to think about what I really wanted in my next step,’ I don’t think I’d get any pushback.”.
LinkedIn now offers a feature called “career break” with 13 different options to explain gapsincluding full-time parenting, career transition, or bereavement.
Mistal encourages taking time to reflect on career and life goals. Having coffee with old colleagues or taking training courses to develop new skills can be ways to keep the momentum going.
don’t take too long
Nevertheless, staying out of the labor force for an extended period can make it more difficult to return. Peter Cappelli, professor of management at the Wharton School of the University of Pennsylvania, warns not to take too many vacations, unless there are personal circumstances that require it.
“Employers are reluctant to hire people who are out of work, and the longer they’ve been out of work, the more difficult it will be for them to be hired,” he says.
Experts say that You don’t have to take a lower-paying or less-prestigious job right away to get back into the workforce, but a part-time job could help bridge the gap.said Erik Baskin, founder of Baskin Financial Planning.
It could be a job at a local coffee shop or retail store, or driving for a ride-sharing company or food delivery service. For those with special skills, there may be consulting or job opportunities freelancing.
Monitor the state of the economy
Navigating a layoff is especially difficult given the sometimes conflicting signals being sent by corporate America and the economy. Executives from companies ranging from JPMorgan Chase & Co. (JPM) to furniture retailer RH have warned that the US may be headed for a recession, although the May jobs report seemed more optimistic.
peppercorn toadvises workers who have recently lost their jobs to keep an eye on the economy when making decisions about next stepsLike a career change.
“If inflation continues and there are more job cuts, I think that workers are not going to have the same advantage that they have had in recent months,” he says.
It could depend on the industry you belong to. For example, Tech companies laid off 26,651 employees in April alone, according to the website layoffs.fyi, so jobs in that field could be harder to come by..
For those who still have their jobs, Peppercorn warns against “comforting” and keeping your resume up-to-date.
“You never know what’s going to happen,” he says. “The more up-to-date you are, the more able you are to make an adjustment quickly.”
This article was translated by Andrea González