Ask HR: How to Prepare for Potential Layoffs

SHRM President and Chief Executive Officer Johnny C. Taylor, Jr., SHRM-SCP, answers HR questions each week.

Do you have an HR or work-related question you’d like him to answer? Submit it here.

My manufacturing plant was temporarily idled for three days in response to recent government policy changes. We’re back up and running for now, but I’m concerned about the long-term outlook. What can I do to prepare for a potential layoff? — Jasmyn 

You’re not alone — many professionals feel uneasy about job stability in today’s climate, especially with news of widespread layoffs and economic uncertainty. While you can’t control the decisions your company might make, you can take meaningful steps now to prepare yourself professionally and financially. Being proactive is one of the best ways to protect your peace of mind and position yourself well, no matter what happens. There are several steps you can take to prepare for a potential layoff:

• Start saving where you can. Begin tightening your budget and setting aside extra savings. While some expenses may naturally drop if you’re not commuting, others, such as continuing health insurance, can be costly. Look at where you can trim spending now (think: bringing lunch, skipping takeout, cutting nonessential subscriptions) and redirect that money into an emergency fund.

• Update your resume and LinkedIn profile. Keep your CV current and ready to go. Focus on quantifiable accomplishments and use strong action words to describe your contributions. If you’ve helped your team or company save money, increase efficiency, or improve processes, highlight those wins. Also, take advantage of free online resources to refresh your resume and brush up on your interview skills.

• Activate your network and begin exploring. Don’t wait for a layoff to begin networking or looking at other opportunities. Start having casual conversations, exploring openings, and engaging your professional network. Reach out to friends, former colleagues, industry contacts, and even community or volunteer organizations; opportunities often come from connections.  

• Understand your health insurance options. If you’re laid off, COBRA may allow you to continue your health benefits for up to 18 months, but you should be prepared to cover the full cost plus a 2% administrative fee. Understanding this now can help you prepare financially.

• Be ready to negotiate a severance. If a layoff does occur, inquire about a severance package. Some companies offer a standard severance, but, depending on your role and tenure, you may be able to negotiate additional benefits, such as extended pay, health coverage, or outplacement support.

• Familiarize yourself with unemployment benefits. Each state has its own requirements for unemployment, so it’s wise to familiarize yourself with the guidelines. Knowing what to expect can ease the process if you need to apply.

• Take care of your mental health. The stress of potential job loss can take a toll. If you’re feeling overwhelmed, consider reaching out to a mental health professional or tapping into your company’s employee assistance program (EAP). Staying mentally well is just as important as staying professionally fit.

Preparing for the unknown is never easy, but taking these steps now can empower you to navigate any changes ahead more clearly and confidently. No matter what comes next, you’ll be ready to move forward with purpose.

Related: Layoff FAQs for Employees

I once received a termination notice that did not include a reason. I requested a reason afterward, and it took over a week to finally get it. Can a company terminate me without providing a reason?  
— Allen

Yes, in many cases, an employer can terminate an employee without providing a reason, particularly in states that follow “at-will” employment laws. Under the at-will doctrine, either the employer or the employee can end the employment relationship at any time, with or without notice, and with or without cause, provided the reason isn’t illegal (such as discrimination or retaliation).

While it may be legally permissible in many states to terminate without giving a reason, it’s not always considered best practice. In fact, several states do require employers to provide a written explanation for termination if the employee requests one. It’s a good idea to check your state’s labor laws to fully understand your rights.

Toolkit: Everything You Need to Know About Employee Termination

Even in states where it’s not legally required, providing a clear reason at the time of termination can benefit the employer and the employee through:

• Helping the employee understand what led to the decision.

• Reducing speculation or assumptions of unfair treatment.

• Supporting the employer’s position in the case of an unemployment claim or legal challenge.

From an employee’s perspective, asking for a written explanation — as you did — is entirely reasonable. If an employer is slow to respond or vague in its reasoning, it may be a sign that its decision wasn’t well documented or fully aligned with company policy.

Every organization is well within its right to make workforce decisions to ensure it has the right people to deliver on its mission, just as every worker has the right to make the job decisions that are best for their career path and livelihood. However, how employers execute those decisions is critical. Both current and prospective employees pay attention to how businesses treat their workers. Moreover, if employers expect dignity and respect from workers, they must also be willing to reciprocate, even when terminating employees. Red carpet in, red carpet out, I often say.

While involuntary terminations are tough for everyone involved, transparency and fairness go a long way toward ensuring the process is handled respectfully and professionally.