This might be the year of the layoff — but there are ways you can survive

After two years of working as a writer at a prominent personal finance website, Tiffany Lashai Curtis was laid off in July 2024. Thrown back into the job market, Curtis only received a handful of interviews from her 200 applications and ended up seeking public assistance like SNAP, Medicaid and unemployment benefits. 

“Being unemployed and having to search for a job in such a cruel job market has definitely deepened my anxiety and depression that I've been navigating for a while,” Curtis said.

She recently found a job — but as is the case for many Americans, the search was exhausting, frustrating and longer than expected. According to the latest Bureau of Labor Statistics data, as of February it took an average of 21.3 weeks to find a job. However, nearly 21% of people were unemployed for at least 27 weeks. 

Year of the layoff? 

As economic uncertainty rises and companies worry about the effect of President Trump's tariffs, major companies are letting go of employees. Starbucks, Southwest Airlines and Google have all laid off employees this year. UPS said it will cut 20,000 jobs as it trims its Amazon business and increases its use of technology.

The federal government is quickly becoming the biggest offender. The Small Business Administration is reducing its workforce by 43%. The Department of Education is initiating cuts to its workforce by 50%. The U.S. Department of Health and Human Services plans to cut 10,000 jobs. 

Since the start of the second Trump administration, 24,000 federal employees have been laid off across 18 agencies, according to NPR. While many of those employees were reinstated due to court orders, the majority were also placed on administrative leave. 

“The current administration has many people feeling uncertain about the future of their jobs and entire industries as a whole. Some companies feel hesitant to hire with all of the change, which is leading to fewer open roles for candidates,” said Kyle Elliott, tech career coach at CaffeinatedKyle.com. 

The impact of AI 

Artificial intelligence is improving at a rate that’s hard for the human mind to comprehend. Along with that, AI anxiety is on the rise as people wonder about the future of their jobs and industry as a whole. Bill Gates’ sentiments aren’t reassuring — he projects humans won’t be needed for most tasks within the next decade. 

“Many companies are eliminating roles that can be filled by AI. The truth is, if your job can be done by a bot, your job may be in jeopardy of being cut,” Elliott said. 

“That said, the proliferation of AI is leading to the creation of new jobs to strategize and manage the technology. AI is not sentient, and people must facilitate all of this,” Elliott added.

What to do after a layoff 

If you’ve been laid off, it can be a shock to your system and a mix of feelings. If you didn’t particularly like your job, you might feel a little relieved. If you enjoyed your job and found purpose in it, the loss can be devastating and bring a grief-filled identity crisis. 

For everyone in a capitalistic economy, it’s natural to worry about the financial aspect of having your primary income cut off. After all, we have to pay for housing and food to survive. To help you navigate your finances and maintain your sanity, here’s what to do after a layoff. 

Take a moment. Maybe you heard rumors of imminent layoffs, or maybe you were completely blindsided. Either way, the end result can be far more impactful than you realize. 

“Getting laid off is a traumatic event, so begin by prioritizing your mental health,” Elliott said. That can mean sticking to the basics — getting enough sleep, drinking enough water and eating enough food, and talking with friends. 

Elliott recommends taking some time to process the layoff, whether that’s a day, a week or longer. You might feel like you need to get back to the grind right away, but Elliott notes that taking time off to process your layoff  “isn’t going to dramatically impact your job search in the long term.” 

Having a reset can help clear your head and help you prepare for your job search. It can also give you much-needed time to think about what’s next. 

“You can also use this time to reflect on your short- and long-term career goals. Make a list of what you need and want in your next job, as well as any potential deal-breakers,” Elliott said.

Calculate your financial runway. In an ideal world, you receive a severance package after a layoff. However, it’s important to note that the U.S. Department of Labor states there is no requirement for employers to offer severance pay. If you do get severance pay, be aware that the amount you receive is taxable.

It's key to calculate your financial runway: How long can you survive without an income? Add up your severance and emergency savings and divide it by your basic monthly budget to see how long it will last. 

“Consider your ability to meet monthly cash flow obligations for the next three to six months. Review a monthly budget and ensure you are comfortable with your current expenses. Eliminate any discretionary spending until you have secured a new job/monthly income,” said Jason Fannon, certified financial planner and senior partner of Cornerstone Financial Services. 

During this time, you may need to cut back on the “extras” and get down to a bare-bones budget, despite how awful it can be cutting back on creature comforts and reducing your lifestyle. When it comes to reducing your expenses, you don’t have to cut everything. 

You’ll see the biggest impact if you can lower your housing, food and transportation costs, which tend to be the bulk of people’s budgets. Go through your expenses and cancel subscriptions you may not need or enjoy anymore. 

Review your debt obligations. Whether you have credit card debt, student loans, an auto loan or other types of debt, review your monthly payments and obligations after a layoff. How much are your total monthly payments? Is that within your budget? If not, you’ll want to contact your lender or creditor right away to learn about your options. 

Federal student loan borrowers may apply for an income-driven repayment plan. Without an income, you may qualify for $0 payments. If necessary, you can also look into deferment and forbearance options. Credit card issuers may offer a financial hardship program, which may offer more flexible and favorable repayment terms. 

It might feel awkward or embarrassing to ask about these options. But during this challenging time, you want to keep your credit score and try to keep up with your payments. 

Apply for unemployment benefits. One thing that can help provide a cushion after a layoff is unemployment benefits. You must meet certain eligibility requirements, such as looking for a job and having been employed and earning a certain threshold of income for the past 12 to 24 months. 

If you’re eligible, you’ll need to apply for benefits through your state’s specific website. You can click on your state on this map to find out where to apply. 

Unemployment benefits typically replace less than 40% of your income, according to the National Employment Law Project. Additionally, you can typically get benefits for up to 26 weeks, though it can vary by state. Unemployment benefits are also taxable. 

Roll over your 401(k). If you have an employer-sponsored retirement plan like a 401(k) with more than $5,000, you may be able to keep your funds where they are. But Fannon recommends an IRA rollover, which allows you to transfer your retirement funds from one eligible plan to another within 60 days. Typically, moving your retirement funds isn’t taxable unless you opt for a Roth IRA, which uses after-tax dollars, whereas a 401(k) uses pre-tax dollars. 

An IRA rollover can also give you more options. “The menu of options at Schwab, Fidelity or Vanguard is going to be substantially larger than the pre-selected menu of options with the work plan. This can result in more customization and potentially lower costs relative to the current 401(k),” Fannon said.

You might think cashing out is a good option to help you during this time. But if you withdraw the funds in your 401(k) before age 59 ½ and don’t roll them over, you could face income taxes and a 10% early withdrawal tax unless you meet one of the IRS’ exceptions. 

Get health insurance. One of the most stressful parts of a layoff is losing your health insurance coverage. To stay covered, you can secure health insurance through:

• The Health Insurance Marketplace: Go to Healthcare.gov and choose your state from the drop-down menu. Your state may have a different marketplace, like Covered California or NY State of Health. Losing your job is a qualifying event, so you can sign up for health coverage through the exchange during a special enrollment period. You must apply within 60 days of losing your coverage. Shop around and review premiums, deductibles, co-pays and out-of-pocket maximums. You can also see if you qualify for premium tax credits. 
• Your partner: If you’re married or in a partnership that qualifies, you may be eligible to get health insurance coverage through your partner’s workplace plan. This can be a cost-effective way of getting health insurance, if applicable. 
• COBRA: You may be able to keep your health coverage through your employer, thanks to COBRA. This can come at a steep cost and you must sign up within 60 days. Generally, you can stay on COBRA for up to 18 to 36 months. 

When comparing COBRA to other health insurance options, there are some key considerations. 

“The former employee pays the total premium and any administration costs. These tend to be more expensive than marketplace plans; however, they can provide better coverage. Reviewing the coverage, monthly premium and deductibles are critical in evaluating which service is correct for you," Fannon said.

Update your LinkedIn. After experiencing a blow like a layoff, you might not want to go anywhere near your LinkedIn — and you don’t have to right away. But eventually, you’ll need to update your profile when you’re back on the job search: Employers can and will review your profile. 

“You’ll also want to optimize your LinkedIn profile. Make it easy for recruiters to find you on the platform, as many employers use it to source talent. You can pull language directly from the job posting and weave it throughout your profile, including in the headline, 'About' section and 'Experience' section,” Elliott said.

While LinkedIn is often seen as the go-to social media platform for professionals and a place to find jobs, don’t avoid other sites that could also be helpful. 

“What I most want job seekers to know right now is that they need to be looking for jobs outside of LinkedIn and not just relying on 'Easy Apply' and LinkedIn postings,” said Sam Wright, head of partnerships and operations at Huntr, an AI Resume Builder and job search management platform.  

The company analyzed 401,800 jobs tracked from LinkedIn and found that only 1.1%, or 4,626, converted to an interview. On the site Indeed, there was a 2.65% conversion rate from 26,000 jobs tracked. 

There may be better conversion rates on smaller job sites, so it's important to diversify your job search and not focus on one place when it comes to submitting applications. 

Take care of your mental health. As difficult as it might be, try not to not obsess over your job search and put a limit on the number of hours you look for a job per day. Additionally, be mindful of what you’re consuming online that can send you down a rabbit hole or keep you in a doom-scrolling loop. 

“Consider limiting your consumption of social media and news as you seek your next role,” Elliott said.

Ask for what you need. While unemployed, Curtis was vocal about looking for work on LinkedIn. Receiving support and referrals from others helped her cope.

“I think that there's a culture of shame and silence around being laid off and being unemployed for a long time,” Curtis said. “Be loud about your situation and the kinds of help you need."