News of the impending Qualcomm layoff hit the people of San Diego hard in recent weeks. According to reports, it seems that Qualcomm is set to lay off about 15% of its workforce. This has become fairly commonplace in the American workplace, though it’s been a while since it happened locally on such a scale. Still, Haggen’s team reductions and this news item got me thinking about how people can prepare themselves when the proverbial axe is about to fall.
1) Review Your Emergency Fund
The Qualcomm layoff is like many others in that it likely came as a shock to a large number of people. Unemployment insurance probably won’t be enough to pay the bills while you’re out of a job, so you will most likely need to draw on savings to make up the difference. Prepare a lean and mean budget and cut spending to add to your emergency reserves. It’s best to have at least 3-6 months of essential expenses (housing payments, food and insurance) set aside in safe, liquid savings; more if you think your search might take a while. If you’re still employed and your emergency reserve is sufficient, start paying down expensive debts like credit cards. More savings and less debt give you more flexibility, and more time to find a good job.
2) Get Advice on Finances, Taxes and Possible Legal Issues
If a layoff is a possibility, you should be prepared with a plan to put yourself in the best situation possible. Work with your Certified Financial Planner™ professional, your tax advisor, and possibly a workplace attorney to make sure you understand all your options. Always ask about unused vacation and sick days, and see what you can do about extending health benefits before you start having to pick up the cost via COBRA.
3) Research Health Coverage Beforehand
COBRA refers to the Consolidated Omnibus Budget Reconciliation Act, which gives workers and their families who lose their health benefits the right to choose to continue them under their group plan for a limited time. COBRA can be very expensive, so do your research early and see what coverage is available on Covered California, the state’s health care exchange.
4) Review Your Personal Disability Coverage
Group disability insurance usually isn’t portable (you can’t take it with you if you leave your job), so if your Qualcomm group plan is the only disability coverage you have, losing your employment means losing your protection against a long term disability. You might consider buying a personal policy that won’t stop covering you if you’re laid off. If you decide to buy an individual policy, do it while you’re still employed—you need to be able to verify your income in order to qualify.
5) Understand Your Unemployment Benefits
Generally, it’s a good idea to file for unemployment benefits immediately, even if you’re getting severance. Check on these provisions as soon as you can. If you get a job before your severance or unemployment runs out, use those funds to top off your emergency fund and pay down debt so you’re in better position to weather any future storms.
6) Take Advantage of Any Free Job Advice or Assistance
If your employer is providing office space, resume-writing assistance or any other benefits to help you transition to your next job, take advantage of the opportunity. It’s particularly smart to get advice with resume writing because as times change, the type of experience that hiring managers want to see on resumes may change as well.
I can’t stress this one enough! Reach out to friends and colleagues, and don’t be shy about asking for introductions. Make sure you’ve identified local or national professional groups that can help you to meet colleagues in your industry. Make sure your cell phone, e-mail and voicemail are always working, and have resumes, cover letters and an interview outfit ready for any opportunity that may arise.
We certainly wish all of the people who will be affected by the Qualcomm layoff nothing but the best. This will be a difficult time for a lot of people but with the proper planning it can be overcome and perhaps lead to greater opportunities. If you have additional questions or need assistance with financially preparing for an impending layoff, please contact us at any time.
Image: Qualcomm CEO Steve Mollenkopf — Bloomberg News