50% of employers expect layoffs, a survey found. Here’s how to prepare

Many companies have announced layoffs in recent weeks, while others have hinted cuts could be coming. Fortunately, there are steps workers can take to prepare.

“Ultimately, you can’t control what happens in the economy, but you can control building strong professional resilience,” said Mandi Woodruff-Santos, a career and money coach.

Best Buy, Ford Motor, HBO Max, Peloton, Shopify, Re/Max, Walmart and Wayfair are among the companies that have announced layoffs in recent weeks.

Meanwhile, 50% of companies expect overall job cuts, while 52% expect a freeze on hiring and 44% expect job cuts, according to a PwC survey of 722 U.S. executives conducted in early August.

These are executives’ expectations for the next six months to a year and could therefore evolve, according to Bhushan Sethi, co-head of PwC’s global People and Organization Group.

“They focus on what they can control,” Sethi said of the employers. “They’re dealing with geopolitics, supply chain issues, inflation, war in Ukraine, all these factors that they have to determine their strategies for.”

Despite these negative indicators, other data suggests that the labor market remains strong.

Employers hired 528,000 new jobs in July, beating expectations and marking a full recovery of jobs lost during the Covid-19 pandemic. The layoff rate hovered near record lows in June, while job vacancies remained historically high.

About 250,000 people filed initial jobless claims in the week ended August 13 — an increase from the spring but only slightly above pre-pandemic levels.

“Job markets are still incredibly strong from all the data we’ve seen,” Sethi said.

Here are some tips to prepare for a possible layoff.

Workers should first take stock of their specific situation rather than extrapolating based on negative headlines. Your industry could be well protected against layoffs, at least for now, meaning concerns could be misplaced, experts said.

Instead, Woodruff-Santos recommends thinking about your “personal job economy,” including your job and skills. For example, what about employment and vacancies in your industry? What do you see and hear from people in your industry?

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“People should forget what happens in Silicon Valley when they’re not working in this space,” she said. “If you’re a project manager in education or healthcare, that’s a whole different ball game.”

There remains a job market in many areas of the economy, particularly for specialized talent in areas such as cybersecurity and digital, automation, supply chain, and mergers and acquisitions, Sethi said.

It’s always wise to have an emergency fund, but this financial buffer will be especially important after a layoff.

This money will help fill an income gap during periods of unemployment. Many workers receive no severance pay or only a few weeks of income. Workers are not necessarily eligible for unemployment benefits, depending on their state, employment, and recent income history.

“A lot of people today don’t have three months’ cash on hand,” said Ted Jenkin, board-certified financial planner and CEO of Atlanta-based oXYGen Financial. “If you get fired, it’s not necessarily true that you’ll get a severance package.”

Workers should also look at their expenses, which will determine how long their emergency fund will last, he added. You should include student loans in those calculations — payments are scheduled to resume after Aug. 31, although the deadline could be extended, Jenkin said.

Additionally, it’s a good time for workers to make any necessary health appointments while they have their existing insurance plan, especially since many people may have reached their deductible for the year, Jenkin said.

Those with a 401(k) plan loan might also consider expediting repayment. Tax penalties can be imposed on laid-off people if they fail to repay this loan within a specified period (usually 90 days) after losing their job.

Workers can also focus on building their “work resilience” ahead of a potential layoff, Woodruff-Santos said.

Many people focus on dusting off a resume during career transitions; But that’s not necessarily the key to finding another job, especially for those in the more advanced stages of their careers, she said. Personal branding and personal relationships are becoming increasingly important.

Individuals can participate or participate in panels at industry conferences, attend workshops, and post or share industry-related content on social media sites like LinkedIn — all in the service of interacting with their career network, Woodruff-Santos said.

Workers completing a team project may consider making a “shoutout” on social media promoting the work and, for example, tagging team members involved, she added.

Excelling at work and being a good colleague can help in the long run, especially if former colleagues remember your work and can help recruit you to another company.

“You can’t underestimate the value of these connections you’re making in your current job,” said Woodruff-Santos.