10 Hard Truths About Layoffs

Many things about the dotcom boom were, in retrospect, obviously unsustainable: absurd stock-market valuations, 24-year-old CEOs, dogs in the office, investment bankers clad in khakis. But perhaps nothing was quite as surreal as the white-hot condition of the labor market. Talk about bargaining power! Freshly minted college grads of no particular distinction commanded salaries that their parents worked a lifetime to achieve. Run-of-the-mill software developers were hotter than first-round NBA draft picks. And the biggest challenge facing an aspiring "biz dev" wizard was deciding which of several competing offers was most likely to end in a Porsche Boxster.

In case you hadn't noticed, the party's over. In the first five months of this year, U.S. companies cut 652,410 jobs -- 38,650 more than in all of 2000, says John A. Challenger, CEO of the international outplacement firm Challenger, Gray & Christmas. Some 41% of those cuts have come from the technology and electronics sector, he adds. And we're not just talking about lousy companies. Some of the best-known, most highly respected companies in the world -- companies that we've celebrated in the pages of Fast Company -- are cutting jobs by the thousands, even the tens of thousands. Cisco. Intel. Dell. Hewlett-Packard. They are the great names of the new economy -- and their plans for the future seem to involve getting there with fewer people.

Which brings us to the topic that we plan to explore all week: How does a smart person with big career ambitions adapt to the drastic changes in the labor market and retool for the challenges ahead? How do you respond to the new era of downsizing without downsizing your dreams? We begin with some tough love -- a collection of lessons that aren't always pleasant to hear, but which we think will prepare you for the challenging months ahead. We talked to CEOs of major corporations and executive recruiters at some of the nation's top search and outplacement firms. We've distilled their insights into a short, unsparing -- but not unhopeful -- list of 10 hard truths about layoffs that your father, your college recruiter, and your local HR representative likely never told you.

But don't forget the most important lesson of all. Markets go up, and markets go down. Digital technologies catch fire and then burn out. But through it all, the defining truth of the business world is that people are still front and center. If you're a talented person with a real passion for your work, you are living in the right times -- layoffs or not.

1. There are worse things than being laid off -- like staying in a bad job for "security."

For the past five years, everybody's had the same dream: to find work that doesn't feel like work, where every day is a new challenge, where what you do really matters to your company -- and to you. In a period of economic doldrums, it's natural to let that dream fade -- to hang by your bloody fingernails to the edge of your desktop, even if the job you're holding doesn't pass your personal desirability test.

But is that really how you want to spend your days? Is downsizing your ambitions the right way to respond to a downturn? It's true that good jobs are harder to find now, and nasty things like mortgage payments and phone bills conspire to make chucking it all unrealistic. But the soul-deadening effects of a bad job reverberate far beyond the 40 hours you spend grinding through the workday.

So, if you're in a crummy job, don't give into the temptation to just keep toughing it out because it's safe. And if you've been "downsized," don't rush to settle for the first job that comes your way. One of the new realities of the next economy is that a patchy résumé is no longer considered cool, says Philip D. Simshauser, president of the Center for Executive Options at the outplacement firm Drake Beam Morin. "Job-hopping used to be about chasing growth or following technology," he says. "But now, saying you've only been at a job for a couple of months because you made a dumb decision doesn't play well. Having multiple short jobs on your résumé damages your credentials."

So be sure your next move is to a place where you're likely to stay a while. And if it takes a little longer to find that job, so be it. Make sure that when you next hear "Welcome aboard!", your first reaction won't be to run for the gangplank.

2. In fact, losing your job may be the best career move you'll ever make.

Let's not be Pollyannaish about being laid off. Being out of work is no picnic, especially in such trying times. But if the Internet economy lured you into a job that wasn't really such a great fit, now may be a good time to rethink what you originally planned to do with your life.