October 1, 2023

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What To Do When You Know Layoffs Are Coming

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When a layoff happens, it is often heartbreaking, but it is not necessarily the most emotionally challenging part of job loss. The months of uncertainty and nervous anticipation leading up to the layoff can take a heavy toll on an employee’s wellbeing and mental health. The author interviewed dozens of men and women from 2013 to 2016, including lawyers, financial analysts, communication professionals, product managers, and public relations professionals. While they are seen as some of the most affluent and cushioned workers in the U.S., these professionals are not protected from layoffs, nor the acute anxiety that precedes them. In the U.S., where job uncertainty and insecurity are increasingly the norm, exploring structural changes like stronger labour laws, parental leave, and Universal Basic Income is imperative to take some of the pain off individuals, who currently carry all of the financial and emotional burdens.

William* recalls the excruciatingly uncertain months before he finally lost his job. He had worked in the real estate sector, where his work dried up. Piece by piece his responsibilities were taken away. His company­­ was not doing well, that much was evident. It was letting people go in small batches. If you didn’t get tapped on a Friday, you were safe for the next week.

“We were just kind of sitting there staring at each other, waiting for the axe to fall,” William says. And this waiting period was agonizing. “You ever watch like a documentary with a herd of zebra and there’s a lion? The lion catches one zebra and all the other zebras are a little way off, just kind of watching.” William says that’s what it was like for all the other employees. “And then they’re just kind of wondering when it’s their turn.”

When the moment of layoff comes, although often heartbreaking, it is not always the most emotionally challenging part of the job loss. The months of uncertainty and nervous anticipation leading up to it also take a heavy toll on an employee’s wellbeing and mental health: A study of 63 countries found that suicide rates increased six months prior to rises in unemployment rates.

In the U.S., where job uncertainty and insecurity are increasingly the norm, structural changes are imperative for taking some of the pain off individuals carrying this financial and emotional burden.

I interviewed William and dozens of men and women like him, from 2013 to 2016  for the research that I conducted for my book, Crunch Time: How Married Couples Confront Unemployment. I spoke with lawyers, financial analysts, communication professionals, product managers, and public relations professionals — usually seen as some of the most affluent and cushioned workers in the U.S. When they have jobs, those jobs are well paid, often putting them in the top 10 to 15% of U.S. households in terms of income. And those jobs usually include benefits such as healthcare and a 401(k) –unheard of for many other workers, such as those in the gig economy.

In spite of the apparent financial security and perks, though, these professionals are not protected from layoffs, nor the acute anxiety that precedes them. Over and over, participants in my research concurred with William, attesting that losing a job is a long, drawn-out process rife with torment that starts months before the job loss actually occurs. A job, after all, can be taken away at any moment.

I interviewed Anne, a therapist working in a large organization, who told me that “as a salaried employee there’s sort of this illusion of stability.” But this stability is ephemeral because, as Anne put it, “Some guy just comes in and decides he doesn’t like me… And then all of a sudden I’m not there anymore.”

My participants recounted worrying for weeks, even months, that a job loss was imminent. Rumors and whispers of imminent layoffs circulate in company corridors as employees await the imminent announcement. Scott worked for a global company that was acquired by an even larger one. After the merger, in about the middle of the calendar year, he was informed of the following: “We’ll let everybody know before the year is out what your status will be.” He describes that “people were being let go starting … March of this year, June of this year, September this year, December this year and into [the next year] … The layoff cycle that I was part of was almost two years long.”

The Uncertainty of Contemporary Employment

If my participants could see a job loss was looming, why didn’t they just spare themselves the pain of uncertainty and quit? Their reasons were often practical, for instance, to hold onto health care or retirement benefits. Anne had decided not to resign because she was pregnant and wanted to retain her employer-based health insurance to receive the best care she could. She also wanted to receive her (unpaid) maternity leave. “I wanted to have another baby and so I didn’t want to leave, because you need to work at an agency for a year before you have protected FMLA [Family Medical Leave Act] status,” she says. “So I really couldn’t leave at that point.”

The peculiar and unsupportive social policy context of the U.S. forced participants in this study to hang onto jobs that were fast slipping from their grip. This is the unfortunate price workers pay for living in a risk society where the social contract is gossamer thin.

In the economic fallout from the Covid-19 pandemic, women have had to face more job uncertainty than men (with the strongest toll falling on women of colour). But even in “normal” times, when making decisions about who ought to lose a job, managers prefer safeguarding the jobs of white, married men because they see these men as breadwinners for their families whose income is necessary for their household. Women of all races and men of colour, in contrast, are not seen as having these responsibilities in the same way by decision-makers. Thus uncertainty, though ubiquitous, comes in various flavours and is particularly acute for women.

No matter who is experiencing the uncertainty, however, it comes with grave psychological costs. In a last-ditch attempt to save their jobs, soon-to-be-unemployed workers live the pre-layoff months in bursts of frenetic energy: They meet with colleagues, network with departments within their companies and hope that someone might be able to help them keep their job. They spend more and more hours at work. They know the improbability of surviving the upcoming layoff, but they continue hoping for the best, straddling two worlds: bound to a company that doesn’t quite want them anymore, but not fully in the world of the job-seeker.

The adverse effects of insecurity can spill over to the home, as well. My participants described thinking incessantly about their uncertain employment futures. They were constantly on edge with their spouses and children – their nerves frayed. Parker, a high school student in his early teens, described that for him the toughest part wasn’t when his mom lost her job, but the several months before. “She was worried about losing her job and would get irritated really easily.” Parker adds, “We had to be really careful around her in those days.”

Rethinking Policies for the Current Employment Landscape

First, access to quality health care needs to be decoupled from employment. This health care should be broad and comprehensive, also providing room for paid parental leave, to enable individuals to lead fulfilling lives in and out of work. In the absence of this, people like Anne hold on to increasingly miserable jobs with dire consequences for their mental well-being.

Second, given the frequency of workers moving into and out of jobs and into and out of employment, it no longer makes sense for financial security in retirement (indeed, retirement itself) to be overly dependent on employment. As it is, retirement benefits for those lucky enough to receive them in the U.S. have been stripped down. The older form of more secure pensions have largely been replaced by defined-contribution plans (i.e. 401(k)s). These plans offload the responsibility for saving and planning for retirement much more onto workers than was the case in earlier decades. Stronger labour laws could help safeguard worker’s financial futures by requiring more comprehensive retirement contributions from employers than are currently the norm.

Finally, while policy measures like temporary extensions of unemployment insurance or increases in benefits are necessary in the short-term, policymakers must pay attention to the fact that, as paid work is currently organized, unemployment is a recurring reality for workers. Given that, Universal Basic Income may provide an option that does not tie the ability of workers to live, eat, and survive – nor their sense of moral worth – to employment which simply does not provide this. Measures like these will not fix the larger problems that lead to rampant job insecurity, but they can start to relieve some of the pain endured by individuals caught in this system.

*All names are pseudonyms.

—Source: Harvard Business Review