What if your company shuts down? How employees can survive sudden layoffs without tears

After 30 days, a number of Reliance Communications (RCom) employees could be looking for another job. The company is believed to be closing down major parts of its wireless business. In June, RCom chairman Anil Ambani had said that the country’s telecom sector had cut 10,000 jobs last year and the ongoing stress would further lead to reducing 30,000-40,000 jobs this year. Price wars, heavy debt and plunging profitability have crippled the telecom sector. According to an ET report, multi-billion dollar telecom mergers could see 25,000 pink slips. The number could go up to 1 lakh if those indirectly employed are also included.
Losing a job without any fault could be nightmarish for an employee. In case of mass layoffs, it becomes all the more difficult to find a suitable job as placement agencies are flooded with CVs. Suddenly, a large number of people start chasing a limited number of jobs. This not only brings down an employee’s bargaining power but can also mean a short spell of unemployment for many.
When new jobs are hard to come by and a lot of companies are retrenching employees, everyone must plan for the eventuality well in advance so as to avoid panic at the last moment and the resulting inability to survive the layoff. Below are a few steps you can take in advance and a few others after you have lost your job so that you survive the sudden layoff without much damage.
Build an emergency corpus: Whether the spectre of a lay-off is looming or not, make sure you have a contingency corpus equal to six months’ expenses at your disposal. If you suspect that the job market is shaky, shore up another six months of loan EMIs.
Get an independent health insurance: It’s another step you need to take before you lose your job. Don’t be secure in the knowledge that your company is providing group health cover to you and your family. If you suddenly find yourself jobless and you or any family member faces a medical emergency before you land another job, you will have to pay from your pocket and may not have sufficient resources to cover the expenses.
Slash expenses and form a new budget: This is the first step you need to take if you get the pink slip. Depending on your savings and fund availability, you will have to re-frame the household budget. Make sure you give priority to fixed expenses like insurance premium, loan EMIs, investments and utility expenses, and slash discretionary expenses drastically. You can also assign the settlement money from your previous job for fixed or household expenses.
Sell assets, take loan against investments, borrow from family: If you don’t have an emergency corpus, dip into your bank savings. If it’s insufficient, sell some of your assets or redeem investments like mutual fund units. You could also take a loan against assets such as fixed deposit, PPF, insurance, gold or property. The interest rate is not as high as that of a personal loan and you retain your assets. Do not, however, dip into your retirement savings and avoid taking personal loans or maximising your credit cards, which come with a high interest rate.
Reschedule loan EMIs and insurance premium, stop investments: Among the most difficult financial obligations to fulfil if you don’t have a regular income are loan EMIs, insurance premium and investment instalments like mutual fund SIPs. If the finances are too constrained, stop your investments temporarily. Since the insurance premium cannot be avoided for fear of the policy lapsing, find out from the insurer if you can alter the periodicity of payment or reduce the cover amount temporarily. As for home or vehicle loans, you can request your bank for a temporary EMI holiday till you get a new job, or reduction of the EMI amount by increasing the loan tenure. Besides, consider the option of loan protection plans, which cover your loan against emergencies such as these.
First try within the organisation: If you think you are likely to be laid off due to poor performance, speak to your bosses. Ask them for a chance so that you can improve. If that does not work, try getting a new profile. Seek transfer to another department or location.
Update resume, tap online portals : If you can’t find a suitable role in your existing firm, begin an aggressive search outside. Rebuild your resume, update your professional online profile and tap online job portals.
Reach out to your network: Another good avenue to exploit is your professional and personal network. Reach out to your former teachers, colleagues, friends, associates, and even family members. This can yield good results but not quickly.
Take part-time job, not the first job offered: When you are desperate for a job, it is easy to succumb to the first offer that comes along. However, don’t grab the first job offer, especially if it doesn’t match your skills or offers a very low salary. On the other hand, don’t hesitate to opt for a part-time job. You can take up tuitions, teach art or singing, write a book, even take up part-time teaching jobs in private and professional colleges or universities that invite visiting faculty.
Upgrade skills: Another important thing you can do to enhance your employability is to upgrade your skills by taking up a short professional course. It will not only allow you an additional leverage but also widen the spectrum of jobs you can apply for.
Explore hobbies, entrepreneurship: Finally, the interim period may provide a good opportunity to tap your passions, hobbies and other skills. So by all means stage dance performances, take up art classes in professional colleges, write for media publications or take oratory classes. The only thing you should not do is give up hope and lose confidence. Whichever means you employ or route you take, accept the challenge head on and pursue the search for a new job proactively and passionately. You may have lost a job, but you could win a new and better opportunity.
Here are the things you should avoid if you want to maintain your mental and financial balance, as well as land a good employment offer.
Don’t panic or stress out: Financial obligations can push you into depression, but if you allow yourself to lose control, it will show in the interviews for the new job. Focus on your skills and be proactive in finding a job, instead of waiting for a call or moping.
Don’t avoid creditors: If you have debts, be it credit card bills or loan EMIs, don’t go into hiding. Meet your bank or financial institution and request a restructuring to suit your payment ability. The bank is likely to oblige if you’ve been a trusted customer.
Don’t dip into retirement corpus: At no cost, dip into your retirement savings, because even after finding a job, you are unlikely to rebuild the corpus immediately, losing out on the investment opportunity.
Don’t take the first job: The temptation might be strong, but avoid the desperate bid for the first job that comes your way if it offers a very low salary or does not suit your skills. You will take a long time to raise your income and become frustrated.
Don’t badmouth your employer: No matter how unjust your dismissal, do not badmouth your boss or organisation. If word gets around, you will find it hard to find a new job because no one wants a whiner and you would have burnt your bridges with your employer as well.

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