Downsizing has become the norm as companies desperately try to keep up with technological advances and changing markets. Intel fell prey to this trend in 2016, eliminating 15,000 jobs worldwide. (1) Unfortunately, the layoff spree is not over. In August of 2017, Intel’s CFO sparked rumors of another round of layoffs, possibly numbering in the hundreds. (2) Whether or not you are at risk of losing your job, there are steps you can take to set yourself up for future success, at Intel or elsewhere. Here are some steps to take how to prepare for a layoff:
How To Prepare For A Layoff
1. Stay Connected
Many of those who were laid off in 2016 were those in their 40s, 50s, and 60s. (3) Early retirement packages were offered to a significant amount of employees, making it difficult for many to decide whether to look for work elsewhere or end their career earlier than planned. If you are not ready to retire, you need to make it a priority to network and stay connected to others in your industry. You never know when those connections will open doors for you down the road.
2. Build An Emergency Fund
When you are laid off, there’s no guarantee that you will be offered a generous severance package to tide you over until you get a new job. You will need some funds to pay your bills, and that’s where an emergency fund comes in. It is recommended you have 3-6 months of living expenses in an easily accessible account. Beyond the emergency fund, you should build a “Core Cash” account that grows in a tax advantaged way and has downside protection. This cash should be available for you to use in whatever way you find is necessary.
3. Bulk Up Your LinkedIn Profile
According to a JobVite survey, 95% of recruiters use LinkedIn to search for candidates and 92% post jobs on LinkedIn. (4) If you are going to be looking for a job, LinkedIn is not optional. Just having an account with a one-line job description is not enough if you want to be competitive. You need to update and expand your profile to stay relevant in your industry.
4. Clean Your Desk(top)
Oftentimes when you are laid off, you aren’t given much time to clear out your desk and take necessary files. Be proactive by saving relevant contact information, personal files, employee performance reports, etc.
5. Create A Financial Plan
Before you decide if you are going to retire or keep working you need to know your retirement options. According to the Journal of Vocational Behavior, those who feel like they retired on their own terms versus being forced out reported higher life satisfaction and felt better both mentally and physically. (5) How do you know if you can afford to retire? By creating a financial plan with a trusted financial advisor who can work with you to examine various retirement scenarios and gauge your retirement readiness.
In the case of Intel employees, it’s especially important to work with a financial advisor who has experience with corporate employees and understands the ins and outs of Intel’s retirement accounts and company stock.
6. Have A Contingency Plan
If you choose to retire, you need to know what funds you are going to draw from first. Different kinds of accounts have different rules and tax implications. For example, if you pull from an IRA before you turn 59 ½ you will be penalized. However, if you are laid off after age 55, you are free to withdraw money from a 401(k) without incurring penalties.
You should also have a plan of action to ensure you have adequate healthcare coverage, especially if you decide to retire early and do not yet qualify for Medicare. A knowledgeable financial advisor can help you analyze your options to see what is best in your situation. They can also help you strategize the best way to pay the premiums, such as using IRA funds penalty-free regardless of your age.
7. Don’t Do It Alone
Dealing with company layoffs often brings up conflicting emotions and requires far-reaching financial decisions. Don’t try to make all these decisions on your own or choose your future based on how you feel at the moment. You will have a lot more confidence in your decisions if you make them with the counsel of an experienced financial advisor. As a former Intel employee, I am here to guide you through this transition. If you want to prepare yourself for a possible layoff or need help determining your financial options, give me a call at (503) 303-0906 or email [email protected]. Together we can develop a plan so you can walk away from your current job with confidence and joyful anticipation of the future.