Sometimes you just see the writing on the wall. Rumors are flying, reasonable budget requests are denied, and there are mysterious visitors to your company along with rah rah rah reassurance meetings. These are all signs that the company you work for might be in trouble, and a company in trouble frequently equals layoffs. If you suspect an impending layoff (or even if you don’t) there are things you can do to prepare.
Understand your current financial situation. If you don’t have a spending plan (aka a budget) sit down and develop one now. What are you spending your money on now? How much of that spending is for necessities? How long could you go without a paycheck? What are your priorities? (Food, shelter, then other bills.) It’s a lot easier to sit down and do this now, than to wait until you’re forced by circumstance to do so.
Be sure you have an emergency fund. If you don’t have one now, start socking away extra money immediately. But don’t just stop at “extra” money. Cut expenses to funnel money to your emergency fund instead of spending it on non-essentials. Cable TV is not a necessity. Neither are meals out or voice mail. (Remember answering machines?)
Scale back on debt reduction. Yes, we all hate owing money to credit card companies. But this might not be the time to go gung-ho on repaying them. Consider switching to minimum payments instead, and put the additional money you would have spent on debt reduction into a high-yield savings account instead. Earmark it for debt reduction OR bare-minimum living expenses if and only if you do get laid off. If the danger passes, you can apply it to debt reduction.
Delay unnecessary purchases until the future is a little more certain. Want to go on vacation? Wait. (Not only do you want to avoid spending the money, you want to be at work showing how essential you are.) Thinking of a new car? Get your current one repaired instead, or ride the bus.
Shine. Speaking of being at work, be sure you really shine while you’re there. Volunteer to do extra work, be cheerful, pleasant, and responsive, and just generally go the extra mile. If it comes down to you and a similar employee, you want to be the one they’ll keep.
Network. Be sure you have contact information for your coworkers and bosses, as these are likely to be the people that can help get you a new job in the future. Check in with other people that you know as well from your past. Say hi, see how they’re doing and what they’re working on, do them a favor if you can, etc. Sites like linkedin are a great way to do this without being too obvious.
Improve your skills. Browse the job listings to see what kinds of skills are most in demand. Are you missing any of the ones that would apply to your field? Now’s the time to learn them, especially if you can do so for free or at a very low cost. Check out the library or your local community center for related books and classes. And don’t forget the internet. (Google knows all.)
Prep your resume. Now is the time to update your resume and keep an eye out for potential new offers. Write up your current job duties in the most positive way possible, and scout the internet at night looking for related jobs that you might be qualified for. Unless you are in a field where it’s the norm to have a multi-page resume, be sure yours fits on one page. Triple check it for spelling errors, and have a couple of trusted, non-work friends check it as well.
Begin looking for alternative sources of income. So you’ve always wanted to start a business. Now might be the time to do so, IF you can do it without an investment of money. (This is not the time to take out a loan.) Bootstrap instead. Or maybe you can get a part-time job or sell things on craigslist. If it turns out that you’re not laid off, great, you’ll have extra money to put into savings or towards debt. If you are, well, you’ll have that much more of a cushion.
And if worst comes to worst… If the layoff does come to pass, remember to apply for unemployment immediately, and to negotiate severance if possible. Be sure you leave on good terms too — they may want to hire you back if things improve.