Top Jobs 2008: A Guide to Layoff Survival

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.