Laid Off vs Fired How to Prepare for Unexpected Unemployment

Are you fearing losing your job anytime soon, which prompted you to research the difference between being laid off vs fired? Or are you noticing signs that you might be at risk of being retrenched? Maybe you’re already scrambling for reasons that answer the lingering “why do people get laid off?” question in your head? These are valid concerns, especially considering the current local and global employment climate.   

Getting laid off is out of your control as an employee. Financial downturns happen, and companies make these decisions to survive and not to target you because you did something wrong. Take this perspective when you find yourself in this situation. Losing employment can come as a surprise, but consider it an opportunity to take firmer control of your career path. 

Local and Global Layoffs

The buzz may find root in the recent layoffs at Shopee. The e-commerce giant had let go of teams in Southeast Asia and some staff in Argentina, Chile, and Mexico. The reason behind it? A battered economy. Organisational movements to optimise operations are not new, but for these to happen at this scale can sound the alarms.      

And it even seems to be a growing trend as tech powerhouse Tesla has been reported to close an office in California and let go of about 200 employees. What drove this business decision? Cost-cutting, according to insiders. There’s no denying that these realities can be yours in a few weeks. While these fears may be discouraging, it’s crucial to keep yourself informed of your rights as an employee and find ways to protect yourself.

What It Means to Be Laid Off

In layman's terms, being laid off means losing your job. In a stricter sense, a layoff is a termination of employment done by an employer due to specific reasons that may or may not concern the employee. Typical layoffs are a result of internal restructuring or company downsizing. Layoffs can be permanent or temporary. In the case of the latter, an employee can be rehired once the company's financial situation improves. 

Laid off vs fired 

Both are types of employment termination, but why is being laid off preferred over getting fired? The main difference between the two is their nature. Layoffs stem from management decisions to ease financial burdens. Getting fired is due to an employee’s performance or misconduct, including excessive tardiness despite warnings or breaches in agreements. To differentiate the two, consider who is at fault that caused the termination. If it’s the company, then call it a layoff. And in this case, it’s easier for the employee to seek a job elsewhere. 

Laid off vs retrenchment

Compared to getting fired, both layoffs and retrenchment are involuntary. But getting laid off is also different from being retrenched in terms of volatility. The former can be temporary, while the latter is permanent. When retrenched, an employee no longer has chances of being called back even if the circumstances are better. At the height of the COVID-19 pandemic, many employees were retrenched because of the unpredictability of events. This permanence is more distressing for employees compared to being laid off and getting the chance to wait things out. 

Causes of Layoffs

Here are some reasons that may cause an employee to be laid off: 

Budget Cuts

When a company starts losing money, it becomes inevitable to cut costs, which can mean letting go of people. Salaries take up a chunk of a company’s finances, so reducing human resources can help stay afloat.

Organisational Restructuring

Sometimes, finances aren’t the concern. Efficiency can be an issue that affects employment. This means a company may restructure its organisation by creating new roles or dissolving current ones. 

New Business Acquisitions or Mergers 

New company owners or new management can mean new people. Strategies may change when new faces are on top, and this can mean roles being moved or removed.

Closure of Business Units

Sometimes a branch in the organisation is no longer functioning as expected or has already fulfilled its goals. In this case, the entire unit may face termination.

Realignment of Company Direction 

New vision, new people. A company may set its sights on new goals, and this may mean dissolving positions that do not fit those needs.

Outsourcing

Business decisions have to be made for the sake of practicality, and that might mean outsourcing positions or units to agencies that are just as equipped to perform tasks. 

Change of Business Address

A company relocating to a new address? It happens, and this can even entail layoffs as the movement can affect an employee’s productivity.

Seasonality

Maybe the job is only meant to be fulfilled during the summer season? Or maybe your skills are only needed during the holidays? Some jobs are seasonal, which means employees can be laid off during downtimes.

How to Prepare for Your Layoff

Anticipating can help soften the blow, so here are some practical tips to prepare yourself for a possible layoff: 

1. Open communication lines

Talk with your manager and find out everything you want to know. This is your right as an employee. Speak with your human resources department also to look into your options and opportunities. You want to cooperate with and not lambast your company.

2. Manage your emotions

You can expect to be emotional as soon as you receive the news of your termination. In this case, try your best to compose yourself and not let emotions get the better of you. Don’t act hastily and still think about every word or action you make.

3. Maximise your benefits

Do you still have any leaves left? You might want to make use of them before you lose the chance. You can also maximise your health insurance at this point before your privileges are taken from you.

4. Read everything before signing

It is expected that there will be some paperwork to be accomplished. Don’t rush into them, especially if your emotions are still unstable. Take the time to read through them and ensure that your rights as an employee are still upheld.

5. Focus on yourself

You might have colleagues facing the same situation. But before you comfort them, make sure your well-being is in check. This doesn’t mean being selfish. Honour your position and respect your emotions. Think of yourself.

Benefits of Being Laid Off

As surprising as it may seem, being laid off also poses benefits to the employee. Here are some to help you look at the bigger picture: 

You now have time to pursue new projects, finish pending tasks, and reevaluate previous accomplishments. 

This may help you redirect your career towards a more stable path. 

You can expand your investment portfolio.

Severance packages are typically offered to laid-off or retrenched employees. Once you’ve budgeted for your daily needs, invest any remaining amount for your future. 

You gain better control of your schedule.

Time to say goodbye to your 8-5 routine! If you’re the type of person who can be more productive at sundown, this is your chance to find an opportunity that works best for your schedule and not the other way around. 

You have the chance to expand your network. 

Why not form a community with fellow laid-off employees? You can help each other out in searching for employment opportunities or push one another for support. 

You can enhance your transferable skills and develop new ones.

Make the most out of all your free time by investing in yourself. Take this chance to learn about something you’ve long been targeting.  

You are afforded time to travel. 

Maybe you’ve been wanting to check out a beach resort a few hours away from home but never had the chance because of work responsibilities. What’s stopping you now? Travelling can also help in your healing process so you can regain back the strength to pursue your chosen career path. 

You are given a fresh start.

Don’t wallow at this period in your career. Consider it an opportune time to reflect and chart a new life plan.

What to Do After Being Laid Off

The common thing to do after being laid off is to look for a job. This is expected as everyone needs employment for financial stability. But before you rush into the next job ad you see, make sure you have a plan. You just went through a difficult situation, so allow yourself to process everything that just happened, then plot an action plan to guide your decisions.  

Look into your budget also. Do you have enough savings to last you a couple of months without full-time employment? If your financial situation permits, you can first consider taking on freelance work while you continue weighing your options. Make sure you also find the time to sit down and update your resume. 

Facing unemployment can be a nerve-wracking experience. It can happen even when you least expect it. What helps is perspective: Consider this an opportunity to focus on yourself. And, remember the difference between laid off vs fired. Most of all, keep in mind that you are not at fault. 

Get started on your career action plan and #LetsGetToWork. Make sure your JobStreet profile is updated with your skills and experiences. For more help, visit the Career Tools page that can guide you in navigating through rough times. And keep yourself updated with the latest news by checking the website or via the app, which you can download on Google Play or App Store.