The Axe is Falling
Amanda did not see it coming. Her most recent performance review was strong, plus she had a great rapport with her manager, so when the year-end layoff rumors began circulating around the office, she thought she had immunity. She should have known better. She, along with the thousands who were axed, never received an invite to the Christmas party and got the worst gift of all — a severance package.
Sadly, Amanda isn't alone. As of November 2007, at least 1,408,852 people have lost their jobs due to mass layoffs, a 6% increase from 2006, according to the Department of Labor’s Bureau of Labor Statistics. And that figure only reflects those who claimed unemployment insurance from employers who cut 50 or more employees at a time.
To make matters worse, employers don’t seem to be hiring; the unemployment rate went from 4.7 to 5% in the space of a month (from November to December 2007), the largest increase since April 1995. Monster.com’s own employment index, which tracks online recruitment across career sites and job boards in real-time, also posted its first-ever decline in online job ads in November 2007.
While companies downsize for a plethora of business reasons — to reduce redundancy after a merger or acquisition, to revamp corporate strategy, or to improve the bottom-line — much of the current job shortage has direct links to the subprime mortgage collapse still reverberating across the country in 2008. Just a few days ago, Citigroup reported record losses ($9.83 billion in the fourth quarter) due to bad mortgage-related investments and loans and will reportedly be slashing 4,700 jobs. With housing prices nosediving and credit becoming ever more difficult to obtain, jobs in manufacturing and construction have been hardest hit, totaling 47% of mass layoffs last year. White-collar jobs are hardly any more secure. Companies that service the housing industry (insurance, mortgage, real estate brokers and banks) were quick to downsize; jobs from media and technology to the usually strong biotechnology/pharmaceuticals also followed suit as a reaction to weak performance in a slowing economy.
Yet some experts believe there's no cause for real alarm. "A 5% unemployment rate is not tragic … not every cylinder is going down," according to John Challenger, CEO of outplacement firm Challenger, Gray and Christmas, who works directly with laid off workers to get back on their feet. "Companies are constantly hiring, growing, changing so there are always openings." On average, his clients have been able to find work within three to four months, even in this gloomy labor market. He still sees strong growth in healthcare, energy, technology and anything with a global outlook. The unemployed could also consider work in government: in November alone, government agencies were responsible for 30,000 new hires.
You may not be at risk of being laid off but there is definitely anxiety over job security in the workplace. If you follow the news at all, it certainly feels as if everyone and everywhere is downsizing. So how can you avoid being the sacrificial lamb for your company?
According to University of Colorado Denver management professor, Dr. Wayne F. Cascio’s research on the culture of downsizing, there isn’t much individuals can do. Downsizing has simply become the de-facto quick fix to address business woes in the US, so being laid off is an unavoidable aspect of corporate life. "A young adult should expect to be laid off three to four times before he turns 50," he advises.
Others like Challenger, however, believe that personal relationships are heavily instrumental in a company's decision to let someone go. From his experience, those who have had "a relationship breakdown" with their employer are far more likely to be handed a pink slip than "a top performer." In other words, work hard and maintain a positive working relationship with your boss — you just may avoid the axe.
While there may be optimism in the job market, being laid off can wreak havoc on your psyche, which could play a bigger role in your ability to rebound than you think. No matter how you got the news — you were denied access to your office via a deactivated security pass or gently let down by your manager — you’ve lost your livelihood and in many cases, your sense of self. Like a relationship gone bad, losing your job can be incredibly painful and life-changing. But it doesn’t have be tragic. We spoke with everyone from a layoff survivor-turned-entrepreneur-and-author, to experienced career coaches and downsize experts, for some words of wisdom and helpful next steps.
Pulling Yourself Together
Allow yourself to mourn: When you lose your job due to layoffs, you’ll feel as if you’ve been dumped by your employer. You’ll feel betrayed, hurt, dejected and angry, which are common emotions associated with grief. "Mourn the loss of your job so you can regain the strength to find a better one," advises Nick Lore, career coaching maverick and founder of the Rockport Institute. In fact, Challenger encourages his clients to take a few weeks off so they can get some emotional distance.
Be resilient: "You’re bound to encounter rejection in your job search, so you need to be resilient," offers Dr. Andrew Shatté, co-author of The Resilience Factor. He believes you can train yourself to be mentally stronger by knowing your own thinking patterns and counteracting against your natural inclinations. You can uncover your innate resilience factor online (click on "How resilient are you?").
Talk it out: From Lore's experience, women tend to refocus and start their job search faster than men. Why? "Because they’re more comfortable talking about their needs and anxieties to family and friends, and doing so helps them move beyond the shock and anger to start thinking about 'What’s next?'"
It’s not that men have nothing to say — they just need to find the appropriate support group to open up to. When Test-Drive Your Dream Job author Kurth lost his dotcom job in 2001, he and a few other job seekers would meet every week to share job search experiences over coffee and bagels (a.k.a. "Unemployed Bagels"). He recalls how all the members in the group eventually managed to bounce back and find jobs they love.
Set a budget: You’ll need to put together a budget to reflect your newly unemployed status. "One thing I cannot stress enough is that it is very important you continue to make your [health] insurance [payments], especially when you’ve been laid off," says Kurth. Whether you go through COBRA or finance your own policy — Kurth remembers financing his health insurance with his own unemployment insurance check — make every effort to budget for this even if it means cutting your spending elsewhere.
Getting Back in The Game
Set goals: As Kurth was brainstorming on what to do next with his family and friends, he made sure he got his ideas down on paper "so I could stay organized and focused."
Make a list of all the things you loved, hated, and would like to change about your life and ex-job. From here, you can begin brainstorming about your short and long-term goals. What other careers have always intrigued you? Are you an entrepreneur at heart? Would switching fields require additional training? If so, where, and how much would it cost? Above all, share your plans, however preliminary, with your support group so your friends can keep you on your toes.
Network, network, network: In Challenger's opinion, you can learn a lot about being work-ready from politicians: "Be like a presidential candidate. Be upbeat and positive even if you're not feeling that great about yourself." Make a point of getting out of the house and interacting with people. The more people you meet, the better.
Create your own network in addition to attending professional networking events. A good way to ensure you get out there and do meaningful work is to volunteer your time for a charitable cause, according to Challenger. You never know who you will meet and what connections they may bring.
Both Kurth and Challenger recommend that you try to identify people whose work appeal to you in some way and make a point of meeting them. Offer to take them out to coffee or even lunch. You'd be surprised how helpful people can be.
And by all means, get up to speed with all the major social networking sites like LinkedIn, MySpace and Facebook. Get reacquainted with your acquaintances. "Just don’t expect these tools to magically land you a job," cautions Challenger.
Through all your networking efforts, stay organized in order to make best use of your contacts. Kurth, during a year long hiatus after his layoff in 2001, conducted over 200 informational interviews; he organized all the contact information in a simple Excel spreadsheet.
Limit your computer use: Challenger believes you’re wasting your time if you devote all your time responding to online job ads. That is why he recommends that you "use your computer to search for jobs after dinner." You should spend your day meeting and interviewing with people, not in front of your computer.
Take breaks: Whether it's going out for dinner once a week (within your means, of course), going for a run every other day, or both, taking breaks from your job search is essential to your mind-body wellness, which will help you stay energetic and motivated.
There is no denying being downsized is difficult, and bouncing back, harder still. But it is not impossible. Kurth spent a year exploring his options before deciding to start Vocation Vacations, a company that helps clients test drive their dream jobs as vacations. At the time, he had three mortgages to pay off, and both he and his partner got the pink slip on the same day, but they found a way to survive. So can you. "[Being laid off] can be a tragedy or an opportunity," offers Lore. "Turn it into an opportunity of a lifetime. What do you have to lose?"