Posted on November 21, 2016
Layoffs are inevitable, your reaction shouldn’t be
Last week there was a “reorganization” at my work. In two places in the country thousands of jobs have now been affected. Of course, I have to follow the stories, work late, do my job but I am sad for these people and what it means for them and their families.
I know that announcing these things right before the holiday season seems cruel but I have heard the logic that it prevents people from overspending and going into debt over Christmas. Yeesh! In fact, every layoff I have experienced (four, if we are counting) has happened right before the end of the year. I am surprised I don’t actually have huge anxiety this time of year, come to think about it!
I remember one in particular; I was working in the finance department of a national printing company. I was working full time and trying to finish school part-time, living at home, making about $24k a year. A hush filled the company as it happened, and of course senior management was called in to assure the rest of us that our jobs were safe. Survivor was an incredibly popular TV show at the time and our director opened the meeting with, “Well, if you are in the room today, Congratulations! You haven’t been voted off the island!” I am still horrified to this day every time I think about it.
Realistically, there is no good time for a layoff. No one wants to be told that they’ve been made redundant (the term the British aptly use) and that their years of hard work are essentially unappreciated. There are so many emotions that happen even before we discuss the financial impact and all the feelings that go along with that such as work being part of your identity and daily routine.
I have only had one layoff in the technical sense. I worked for the federal government for almost three years flipping back between contingent employee and contractor. They promised they would compete my job so I had the chance to apply to be an actual employee but that never happened. Then all of a sudden, the program I worked for lost their funding and then had to let go a huge swath of their staff across the country. The last six months I worked for the organization I managed the correspondence where the Minister had to reply to citizens who were upset that they were losing our regional presence. My job was to coordinate the responses to these letters, which essentially involved farming them out to the people in regions to craft a reply as to why they were being let go. The Minister would then sign them and send them off. It was an absolutely depressing job and a brutal end to an otherwise good run.
A friend in Maryland once spoke of a human resources officer that had to lay all the staff off in their satellite office and then lay herself off. Awful.
There is this falsehood that permeates working culture that public service jobs are for life. Yes, it can be harder to get rid of people than it is in private industry but the PS has had its own share of layoffs as well. Those layoffs in the mid-2000s were the first ones I had seen in my working career, and then the previous government began massive layoffs in 2012. In fact, the DRAP – Deficit Reduction Action Plan – saw almost 20 000 jobs being cut as organizations were asked to cut 5%-10% of their budgets. Of course, the work didn’t go away so that work was filled with consultants and contingent workers. In an almost joke fashion, the cuts looked good on paper “we’ve reduced payroll and benefits,” when realistically the O&M budgets shot sky high. It’s all how you want to word it, I guess.
Of course, now I am in a great job in a great location and I love the management and the staff – but I never get comfortable in thinking that it will be forever. I know that these things go in cycles and I could encounter a job loss just as much as anyone else may.
When I first got laid off, my mortgage at the time was $650 and my condo fees were $200 (which included utilities). Mr. Tucker was still working full time, earning way more than we needed to support ourselves, and of course I was eligible for Employment Insurance (EI). So at that point in our lives we had a lot of breathing space financially. However, we also had a pretty high-falluting lifestyle and I had made the decision to start a small business. I was lucky to be able to join a program for people on EI who were looking to start their own businesses. I applied, did the interview, and was accepted into the program. It gave me a second year of EI as well as business courses to help me get my business off the ground. After the uncertainty of full-time employment & being kicked to the curb, running my own business gave me an incredible sense of agency and control.
I worked that business for almost five years until my second child was born and I was forced to pack it in for my next adventure: moving to a larger space and becoming a full-time stay-at-home-mom (SAHM). Mr. Tucker’s career had taken off at this point and he could support the entire family on his income alone. Of course, over the next couple of years we had a rocky time living through one layoff, and racking up some debt but we managed. It was when our youngest child was two-years-old that things at his new job started getting a bit scary with layoffs and reorgs of its own that I decided I had to do something. I could see that Mr. Tucker was a bit worried about being the sole breadwinner that I did some calculations and began to explore going back to work.
The eldest was in school but I had to pay for daycare for the youngest so I made a plan and put out the word that I was looking to take contracts – any contracts – that paid over a certain amount (to cover daycare and expenses). I hadn’t been in the workforce for about seven years at the time so I was willing to take anything. I landed my first contract within a month, and the rest is history. I did five years of part-time contracts, taking summers off with my kids. Mr. Tucker’s worries about layoffs never came to fruition and he still works at the same company to this day.
So why the long post about my life when we are discussing layoffs? Because I wanted to show by example that life after a layoff can take a zig-zag-like trajectory and you can still land on your feet. Below is not a comprehensive list of what I have learned but instead some things to think about, starting today.
Before you are laid off
Live below your means: I know this sounds like obvious advice but I can’t stress it enough. If the reports are to be believed, many people think of how they can fit a payment into the budget, not how much debt they are carrying. That can be a real problem if you are maxed to the hilt with monthly payments and experience a layoff.
Buy less house than you can afford, buy a less expensive (or better, used) car, keep your grocery and entertainment budgets reasonable. We also have a tendency to overspend on our kids. If your kids are used to big-budget entertainment and activities and suddenly that well dries up, you will be dealing with the emotional and financial problems associated with your layoff AND the sadness and disappointment from your kids who don’t understand why they can’t go to the super-duper kid entertainment centre for their birthday.
Have an emergency fund: Even if you discover that you will get EI, there is a waiting period. The bills don’t stop rolling in just because the paychecks stop, so give yourself a buffer that isn’t built on using debt to manage an emergency. One month worth of expenses is better than nothing, each subsequent month you can save is ideal. Anything is better than nothing.
Have an emergency budget: This is the stripped-down version of your regular budget where you just cover the major living expenses: food, utilities, housing, transport etc. No extras. This will be the baseline of getting by. In an ideal world, a middle class, two-person household should be able to cover these basics on one salary alone, or combined with your emergency fund.
Live your financial life like the rug could be pulled out at any time: I am not saying obsess about being laid off on a constant basis but don’t rack up bills and debt that could push you over the edge. If you have to wonder if you can fit a new payment into your budget, you can’t. Hope that you won’t experience a job loss is not a replacement for good financial planning.
Don’t let your job define you: if your identity is wrapped up in where you work or what your job is, it can be harder to take when you lose your job. It’s nice to enjoy your career and feel important but if that is taken away from you, what is left? Concentrate instead on what a good partner, friend, and/or parent you are.
If you get laid off
Deal with the personal: some people react by digging deep and throwing themselves into the job hunt. Other people just load up on booze and carbs for a week as they process what just happened. We all react differently to stressful life events but we do need to be easy on ourselves and realize that our jobs weren’t our worth.
Make a game plan: is it time for a career change? Maybe go to part-time? Have you always wanted to start your own business? This layoff may be the kick in the pants you need to make these things happen. If you have an emergency fund or have your bill covered, now may be the only chance you have to experience “what-if?”
Network, network, network: I’ve already covered networking in a previous post but you should start as soon as you know what direction you are going in. Find people in your field to talk to, if you are starting a business hit up an entrepreneur centre or just speak to people who you know run successful businesses.
Realize you aren’t alone: you are neither the first nor last person who will be laid off over the course of a lifetime. It doesn’t make it hurt any less but knowing that others have been through it helps. Contact people you know who have been through the same thing, they may have some solid advice on what worked for them.
I feel like our parents lived in an age where you entered a company, worked hard and were dedicated, and then worked their way to the top of their fields. They carried that narrative on when they raised us even though the job landscape had changed radically since they had started working. Right now it’s taken as fact that most people change jobs many times in their lifetimes and often we switch careers a couple of times as well. Since graduating from university I have held jobs from cleaning to finance to administration to communications. I have also held seven jobs in five years.
It’s important to stay nimble and adaptable in both your career and financial life. The more you take control of what you have agency over, the less you will be affected by the things you don’t have control over.