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What it means to be laid off from work and how to get through it

January 2, 2023 - 22 min read


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What does laid off mean?

Are there any layoff benefits?

Laid off versus fired versus furloughed versus quitting

How to cope with being laid off

You'll bounce back

Losing your job is never welcome news. For most people, it's a traumatic and frightening experience.

Even if it's a mass layoff due to industry shifts or a recession — reasons that don’t reflect your performance — it’s still distressing. A sudden job loss can severely impact your physical and mental health, not to mention your financial well-being.

News of layoff is an emotional rollercoaster that can leave you with feelings of hopelessness and worry for the future of your life and career.

Getting laid off from work can also be a push in a different direction. It may be your sign to change careers (regardless of your age), follow your passion, or find a better work-life balance

In this guide, we’ll talk about what it really means to be laid off, how to recover from the emotional blow, and how to get back up on your own two feet.

What does laid off mean?

Getting laid off means that your employer is terminating your contract. Layoffs are usually the last resort for employers and are caused by issues beyond your and the company’s control. They generally happen when a company's finances can't keep up with the cost of employees.

The source of the layoff can be an internal business problem like overhiring resulting in redundancy in staffing — when too many people are performing the same job — or annual profits that don’t align with the projections.

They can also result from external factors like a national recession or global challenges to the supply chain. During the height of the COVID-19 pandemic, the 12 largest American companies laid off nearly 100,000 employees.

Whatever the source of the problem, when a company lacks the necessary finances to keep up with costs, it begins restructuring the business by downsizing expenses and eliminating staff.

The pandemic has shown that layoffs aren’t the only option, with companies finding creative ways to keep employees onboard and cut costs in other places.

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Are there any layoff benefits?

While losing your job isn’t something to celebrate, companies may offer your severance benefits when they terminate your contract. Here are a few benefits that you might be eligible to receive:


Many hiring managers might have highlighted their severance packages during the interview process. Offering severance pay recognizes an employee's work while serving the practical purpose of making a company attractive to potential employees by laying out what to expect with your health insurance, 401(k), and other employment benefits.

It’s also a way to avoid lawsuits down the road since most employees must sign a release agreeing not to pursue additional compensation or seek legal action against the company as part of the separation agreement.


You can always negotiate your severance package. You don't have to sign a severance agreement immediately, so take your time to carefully review the conditions and compare them to industry standards and severance packages being offered to other employees.

Here are some unemployment benefits to consider in your severance agreement:

  • Amount of severance pay
  • Payment plan type (installments or lump sum)
  • Reimbursement for unused paid time off and annual bonus
  • Continuation of healthcare costs
  • The exact date of termination and final paycheck
  • What will happen to your retirement plan or stock options

Employment in an allied company

If you work for a large corporation or multinational, it's likely that your employer has an outplacement program and can recommend you find a new job with potential employers at other companies. Reach out to your manager and human resources to ask for help contacting future employers and provide you with a letter of recommendation.

Promise of employment when the company stabilizes

In some cases, losing your job might be temporary. During the pandemic, about 1/4 of unemployed workers were temporarily layoffs.

In this case, ask your employer to define a specific length of time you'd be out of work. Based on their answer, evaluate your finances and desire to return to the company. You can always choose to terminate your employment permanently and find another job.


Government insurance

Laid-off workers who are terminated through no fault of their own can apply for unemployment insurance programs through the U.S. Department of Labor. Unemployment insurance is a federal program that provides cash benefits to eligible laid-off employees, with benefits decided by the state.

If you’re laid off, the first thing that you should do is apply for unemployment insurance with your state's Department of Labor, as it can take various weeks for the first benefit check to arrive. On average, unemployment benefits are provided for up to 26 weeks for former employees, but coverage varies widely from state to state.

Laid off versus fired versus furloughed versus quitting

You probably have questions about the different types of job terminations. Is it better to quit or be fired? What is a furlough? Here are the differences between the different types of job terminations:

Reason for termination

  • Laid off: Getting laid off has nothing to do with you. Layoffs are due to internal or external forces, like a business merger, drop in profits, or recession, that inhibit the company's ability to sustain its staff.
  • Fired: Getting fired is usually linked to an employee's job performance, professionalism, or inability to fit in with the company culture.
  • Furlough: Getting furlough is a temporary unpaid leave of absence, and depending on the time defined by your company, not considered a termination. Employees are expected to return to full-time work and, in the meantime, may be expected to perform a part-time work schedule.
  • Quitting: Quitting is a voluntary decision made by an employee. You might quit a job for a number of motivations, like moving, family responsibilities, disconnection from the company culture, or a toxic work environment.

Benefits and compensation

  • Laid off: If you have been laid off, you’re likely eligible for unemployment insurance through your state's Department of Labor. Depending on your company, your former employer may offer you a severance package with benefits like healthcare and pay continuity, 401k and stock options, and reimbursement of unused paid time off or vacation time.
  • Fired: If you’ve been fired, employers aren’t likely to offer a robust severance package, but you may still be eligible for unemployment insurance.
  • Furlough: If you’ve been furloughed because your employer doesn't have enough work or has temporary economic difficulties, you may still be entitled to healthcare benefits, depending on your company's health insurance plan and your state's unemployment program. However, you aren’t entitled to take paid sick leave or expanded family or medical leave.
  • Quitting: Benefits and compensation from a voluntary resignation depend on your employer and state of residence. Typically, an employee that quits their job is ineligible for severance packages or government programs. In many states, you’re required to prove that you resigned with good cause, like medical purposes or being forced out of the company.

How to cope with being laid off

If you’ve been laid off, you’re probably going through a roller coaster of emotions. It's okay — you're not alone in feeling down.

The financial strain and feeling of loss of control that comes with an unexpected job termination have been linked to decreases in mental and physical well-being. Laid-off workers are likely to deal with depression or poor physical health.

Giving yourself time and space to process your job termination is essential to clear your mind and move forward.

Here are a few tips for coping with an unexpected layoff:

1. Apply for government insurance

Your head is probably in a million places at once, but the first thing you should do after being laid off is apply for government unemployment insurance. Depending on your state, unemployment benefits may take a few weeks to kick in. It's essential to act quickly to make the adjustment more manageable and give you the peace of mind of an income while you evaluate your next steps.

2. Analyze your finances

It's essential to critically examine your current financial situation to decide whether it is appropriate to re-budget your lifestyle. To begin, take a look at your savings and emergency fund, unemployment benefits, and severance pay. Compare those funds to your expenses, separating necessary expenses like healthcare, housing, transport, and food, from non-essential costs.

Once you’ve examined your savings and monthly costs, determine if you need to limit non-essential expenses while you embark on a new job search. Your financial wellness may take a hit if you’re living on an unrealistic budget.

3. Take care of your mental health

Give yourself time and space to process this new fork in the road. It’s common for workers that are unexpectedly terminated to struggle with their mental health. This is a critical time to lean into yourself and validate your feelings and grief.

Here are a few ways to stay on top of your mental well-being:


4. Imagine your new future

A job termination is never exciting news, but a sudden shift could push you to move into a new direction in your career path. You may have already felt like you needed a change but were too comfortable in your old job position. Take some time to imagine where you'd like to go from here. Talk it out with friends and family, consult a therapist, or write down your ideas in a journal.

Here are some questions you can ask yourself:

  • What did I like and not like about my previous job?
  • What am I most passionate about?
  • What is important to me (money, family, personal development, etc.)? Does my current career help or hinder those values?
  • Am I able to start from the bottom on a new career path?
  • What resources do I need to begin a new career?

5. Lean into your community

Our office and co-workers can sometimes feel like a home away from home. Work provides a critical social outlet, so it's important to stay connected if that’s lost. Volunteering or participating in community activities is an excellent way to tap into a new social circle. Here are a few to consider:

  • Sports: A job loss can result in decreased physical well-being. Joining a sports club or taking fitness classes is a great way to stay social and put your physical health first. Consider joining a club (running, swimming, tennis) or studio (karate, yoga, dance, or meditation).
  • Volunteer: People who regularly volunteer see increases in their overall happiness. Look for volunteer opportunities at a local church, school, library, hospital, or nursing facility. You can also check in with your city hall, police and fire departments, local non-profits, or rotary club to inquire about volunteering opportunities.
  • Take a class: If you've ever wanted to take a class but have yet to have the time, this is your opportunity to learn something new or share a hobby with people who share your interests. Consider joining a ceramics class, reading club, creative writing workshop, or painting class. Online classes will still let you connect with people in your community.

6. Learn something new

All this new spare time might make you feel stressed or anxious, but extra free time is an excellent opportunity to learn something new.

Throughout your professional career, you’ll need to upskill your existing abilities or reskill by learning entirely new ones. Temporary unemployment is a great time to prepare yourself with new or revitalized skills for a new job search. Consider what skills you can improve to make you a better professional candidate, like brushing up on a coding language or earning a new certification.

7. Start a new job search

If you want immediate employment, finding a new job is your new job.

Start by updating your Linkedin profile, resume, and other professional social media channels to have everything ready when a job opportunity pops up.

Many jobs are placed through referrals, either internally or through recruiters. Compile a list of people in your professional circle to help connect you with potential employers. Send a polite and short email asking if they know of any job opportunities matching your experience.

If you cannot find a new job through direct contacts, networking events or your local, state, or national industry association are great resources for job seekers to help connect you to the right people and the right job.


You'll bounce back

Although a job termination is difficult, it doesn't mean it's the end of your career. It means a new opportunity is your next step.

During this time, it's essential to take care of your mental and physical well-being and understand that feeling down is a natural reaction.

By tapping into this guide, you have the tools to transition into the next stage of your career. Give yourself the space and time to evaluate your current situation, understand your future goals, and prepare for the next steps down your career path.

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Published January 2, 2023

Erin Eatough, PhD

Sr. Insights Manager

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