Navigating Tech Industry Layoffs
A Financial Planner's Practical Toolkit for Preparation and Recovery
This article builds on my previous article: The Great Unbossing
You can also read this article on Substack
When I started as a financial planner, I committed to approaching this work differently and using my decades of work in the tech industry to help in a different way. IMO, enabling true financial independence isn’t just about managing money well after my clients have earned it; it’s also about helping them earn it in the first place!
Today’s tech industry reality is sobering. The tide has turned, and the balance of power has tilted heavily in favor of employers. Layoffs have become a recurring pattern, and job security feels increasingly elusive. Whether you’re currently employed and worried about your position, or you’ve recently received a pink slip, I’m offering some practical advice drawn from both professional experience and real-world observations.
The Side Gig Myth: Why It’s Probably Not The Answer
Let me address something right away that I often hear in career coaching circles: the side hustle. The advice is to build additional income streams while maintaining your full-time tech job to diversify your income sources. Here’s my honest take after watching many people try this route: it’s much, much harder to do than bloggers make it sound.
If you’re working a demanding tech job, with its deadlines and constant pressure, and you’re also trying to maintain a life outside of work, there aren’t enough hours in the day. The reality is that building a meaningful side hustle that can be called upon to supplement your income outside the typically generous income in tech requires extraordinary discipline, at least 5-6 hours per week of focused effort, and the mental energy to sustain that consistency over the years. Most people I talk to who’ve attempted this path eventually admit it was far more difficult than anticipated.
Your Time Is Better Spent…
Here’s what I suggest instead: focus that energy on your main career. Find ways to keep your job and get promoted, rather than dividing your attention between your job and a new side business. Invest in making yourself more valuable and irreplaceable to your current employer, and build a network of contacts with peers at other companies who can offer an escape route if needed. The mental energy and time you’d spend on a side gig could be better used on managing up, developing key relationships, and reinforcing your position.
How? I’m not talking about simply working harder in the traditional sense. Putting in more hours rarely moves the needle TBH, and in fact, that can be counterproductive. I’m talking about working smarter: Learn how to navigate corporate politics, build strategic relationships inside and outside your company, and manage your boss effectively. If this makes you uncomfortable, consider it an investment in your financial security. Jeffrey Pfeffer’s book, or MasterClass on power in the workplace, is a good starting point, even if some concepts initially feel uncomfortable. The first time I read his book, I wanted to throw it against the wall, but even though I hated it, I knew he was right. If you really want to know how to manage up, Pfeffer’s got the playbook. He says:
“While power carries some negative connotations, it is a tool that can be used for good or evil. Don’t blame the tool for how some people have used it.”
The second part of my suggestion is to activate and sustain your personal network: Proactively reach out to the diaspora of former colleagues you’ve worked with in years past. Check in with them. Meet for coffee or a beer. Find out what they’re up to. Pay special attention to former colleagues currently working at competitors in your space (because that’s the first place you should look if you want to quickly replace a lost job). Industry conferences are an excellent opportunity for this. The vast majority of tech hires are made nowadays through internal referrals. It doesn’t have to be someone you knew very well. Just someone who knew you. So keep your network alive!
Preparing for Layoff Risk: Your Defensive Strategy
The best time to prepare for a layoff is before it happens. Beyond what I’ve written above, here are some additional concrete steps you can take to reduce the impact of being laid off:
Financial Preparations
• Establish a HELOC (Home Equity Line of Credit): If you own a home, consider opening a HELOC now while you’re still employed. You don’t need to use it, but having access to this emergency credit line is far easier to secure while you have a job. Think of it as financial insurance.
• Maintain a robust emergency fund: The standard three to six months of expenses isn’t just conventional wisdom; it’s your lifeline during a job search. Tech job searches are taking longer than expected. Having 6-12 months of emergency funds is not unreasonable.
• Rebalance your investment portfolio: If you’re overextended on risk (too heavy in stocks, especially tech stocks), consider bringing your portfolio back into your target allocation. The last thing you need during unemployment is watching your nest egg decline alongside your paycheck.
Professional Preparations
• Watch for warning signs: Sudden changes in feedback from your manager, especially unexpected criticism or shifts in communication patterns, may signal that behind-the-scenes layoff planning is underway. Trust your instincts. If you have years of positive reviews, then a sudden, unexpected negative review, even though nothing else has seemingly changed, it may not be about you at all.
• Keep your resume current: Update it quarterly, not when you suddenly need it. Think of yourself as a company of one. You must behave like a small business. Corporate loyalty is largely a thing of the past. Research shows that employees who change companies every few years get promoted faster and are paid more than those who don’t. This wasn’t my story, but I can’t argue with the data.
• Build your target company list: Create a running list of companies where you’d like to work. Set up email notifications for relevant job postings at these organizations. Don’t wait until you’re unemployed to do this research.
• Document everything: Consider keeping records of your performance reviews, positive feedback, and notes from performance-related conversations in a personal space you can access after losing access. If you’re over 50, this documentation becomes especially important if you need to consult an employment lawyer.
After the Layoff: Your Recovery Playbook
If you’ve been laid off, the immediate aftermath can feel disorienting and emotionally devastating. Here’s how to navigate this challenging transition:
Emotional Recovery Comes First
A layoff is a gut punch, regardless of how talented you are or how tough you think you should be. It triggers deep questions about your worth and competence. The faster you can accept that your layoff likely had nothing to do with your performance, the faster you’ll recover and the more effective your job search will be (i.e., you don’t need to be saddled with depression or a lack of confidence on top of the stress of looking for work). Even if you were laid off for performance, it’s simply one boss’s opinion about your fit for that specific role at that specific company at that specific moment in time. It’s not a referendum on your value as a human being! Slough it off and move on. The world is a big place, and your company is relatively minuscule, so nobody really cares what happened.
You have value to offer. You are competent and capable. Settling this in your mind is critical. If you need to, simply “fake it till you make it”. It really works. Confidence that you will find something keeps your morale up, which provides the energy to continue pursuing opportunities. Depression and despair are the real enemies in a job search.
Immediate Administrative Actions
1. File for unemployment immediately: You’ve paid into this insurance program your whole career. There’s no shame in claiming benefits you’ve earned. Be smart and do this quickly.
2. Review all ex-employer paperwork carefully: Don’t rush through severance agreements and related documents. Under the Older Workers Benefit Protection Act, employees not part of a larger RIF generally have 21 days to review and sign severance agreements. Use that time.
3. Consider consulting an employment lawyer: If you’re over 50, consider having a conversation with an employment attorney about your situation. Most cases don’t warrant legal action, but some do, and you won’t know without professional guidance.
Healthcare Coverage Strategy
Understanding your healthcare options is crucial and surprisingly flexible:
• Check if your employer covers COBRA: Some severance packages include temporary COBRA coverage. Review your severance documents carefully to understand what’s included.
• Don’t rush into COBRA: The law gives 60 days to elect COBRA coverage. If you incur medical expenses during that window, you can retroactively elect COBRA, pay the premiums retroactively, and submit claims for reimbursement. This means you can wait and see if you actually need it.
• Consider Switching to your Spouse or Partner’s Employer Health Plan: Your loss of employment is usually considered a qualifying event that allows you to sign up for health insurance through a spouse or partner outside of the normal open enrollment period. Check the plan for details.
• Explore ACA marketplace plans: Check your state’s Affordable Care Act marketplace. COBRA is often significantly more expensive than ACA plans. You have 60 days from your layoff to enroll in an ACA plan under a special enrollment period.
Strategic Job Search Approach
Think in concentric circles: Start with the competitors of your former employer in the inner circle. These companies immediately understand your experience and skills. But don’t stop there. Gradually expand outward to adjacent markets, then to completely different industries, as needed. The manufacturing sector, for example, has been hiring more aggressively than tech recently.
Leverage your professional diaspora: Without question, the number one way laid-off employees find new positions is through former colleagues. Anecdotally, I would say this is >80%. Keep track of where people from your past roles have gone. LinkedIn is invaluable for this. These connections understand your capabilities and can advocate for you internally. Your best next job is most likely to come through a personal referral from someone who worked with you in the past 10-15 years.
Apply Hanlon’s Razor to Your Job Search
As you navigate your job search, you’ll inevitably face silence and non-responses. This is where Hanlon’s Razor becomes a vital resilience tool. The principle loosely states:
“Never attribute to malice that which is adequately explained by human error, forgetfulness, or simple overwhelm” (my paraphrase)
When a hiring manager doesn’t respond to your outreach, your brain might immediately jump to: “They’re purposefully ignoring me. I’m not good enough. They’ve rejected me.” Hanlon’s Razor suggests a far more likely explanation: they’re drowning in emails, they meant to respond but forgot, they’re dealing with urgent issues, or they mentally replied but never actually hit send.
This mindset shift from “I’m unwanted” to “they’re distracted and overwhelmed” is crucial for protecting your confidence during a job search. It empowers you to send polite follow-ups without feeling desperate or rejected. Most professionals genuinely appreciate these reminders because they actually did intend to respond earlier but got sidetracked.
The same principle applies across your job search. If someone cuts you off in traffic, they probably didn’t check their blind spot. They’re not trying to ruin your day. If a colleague forgot to CC you on an email, they likely just overlooked your name. They’re probably not purposefully excluding you. Extending this grace to others reduces social anxiety and prevents you from burning bridges over misunderstandings.
Daily Practices for Job Search Success
Journal daily: Spend a few minutes each day writing some notes about the emotional aspects of your job search process. How are you feeling about it? I recommend a Google Doc where you can simply speak your thoughts using voice-to-text. Review your entries weekly. This practice helps you track progress, process emotions, and identify patterns you might otherwise miss.
Write your future in retrospect: Take 20 minutes to write a detailed description of what you want the next six months to look like, as if you’re looking back on them from the future. Describe the job you landed, how you got it, what you learned during the search, and how you grew. What surprised you? This exercise, backed by academic research in psychology, helps clarify goals and can reduce anxiety by externalizing your hopes into a concrete narrative.
Final Thoughts
Layoffs in the tech industry are not a reflection of your worth, your talent, or your future potential. They’re a reality of modern corporate life, driven by the pursuit of profitability, over-hiring corrections, mistakes, and other factors entirely outside your control. What is within your control is how you prepare, how you respond, and how you maintain perspective throughout the process.
Remember: you’ve built valuable skills and experience. There is someone, somewhere, who would be happy to pay for what you have to offer. Your job is to find them. The path forward might not be linear, and it might take longer than you’d like, but with preparation, resilience, and strategic effort, you will land on your feet.
Disclaimer: The information provided in this blog post is for educational and informational purposes only and does not constitute specific financial, tax, or legal advice. All investing involves risk, including the potential loss of principal. Market data and statistics cited are believed to be accurate as of the date of publication, but are subject to change. Please consult with a qualified financial professional to discuss your individual circumstances and risk tolerance before making any investment decisions.