The Affluent Entrepreneur Show

What to Do If You Think You’re Gonna Get Laid Off

July 31, 2023 Mel H Abraham, CPA, CVA, ASA Season 2 Episode 160
The Affluent Entrepreneur Show
What to Do If You Think You’re Gonna Get Laid Off
Show Notes Transcript Chapter Markers

Layoffs, unfortunately, have become a common occurrence in today's ever-changing job market.

It's a tough pill to swallow, but you don't have to let it happen to you without a plan. You hold the power to take control of your situation and safeguard the future for yourself and your loved ones.

In this episode, we're going to discuss practical steps you can take to bounce back and thrive after a layoff. We're talking about more than just weathering the storm; we're discussing how you can transform adversity into a springboard for personal and professional growth.

Get ready to rise above the challenges and embrace the limitless potential that awaits you. This is an episode you won't want to miss!


  • How to increase your value in an organization
  • The financial and psychological challenges faced during layoffs
  • Framework and process for preparing and navigating potential layoffs

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Mel Abraham:

It's time to apprise against the downsides. Listen, some of you have reached out to me say what do I do? Because I'm afraid of being laid off. How do I prepare myself? What do I need to do? Well, in this episode we're going to talk through, we're going to walk through this whole thing of, what do you need to do to prepare? If a recession hits if you might lose your job? And how do you protect yourself? How do you protect your family's future? So welcome to this episode of affluent Entrepreneur Show. Let's get this one dialed in. So you feel comfortable, you feel guided, and you feel supported on this journey, no matter what happens. I'll see you in the episode. Cheers. This is the affluent Entrepreneur Show for entrepreneurs that want to operate at a high level and achieve financial liberation. I'm your host, Mel Abraham, and I'll be sharing with you what it takes to create success beyond wealth. So you can have a richer, more fulfilling lifestyle. In this show, you'll learn how business and money intersect. So you can scale your business, scale your money, and scale your life while creating a deeper impact and living with complete freedom. Because that's what it really means to be an affluent entrepreneur. Welcome to this episode, the affluent entrepreneur show this one I want to talk about tough, tough topic. All right. And that is for those people that maybe feel like I might, I might get laid off. Let's face it. In today's time, there's a lot of talk about uncertainty. There's a lot of layoffs. I know that Facebook just laid off another 10,000 people, there's other companies that have announced layoffs, Amazon, Google and, and a lot of tech companies. So there's a lot of people facing this idea of being laid off, and what do they need to do? How do you protect yourself? What does that look like? And And are there things to do? And? And the answer, the short answer is, yeah, there's things to do. There's things that you can do now, one of the things I want to be really careful about in this episode, is it's really easy for you to look at your life and say, I should have, I could have should have saved more I should have put more money away, I should have listened to Mao, I should have had that peace of mind what I should have done, I should have I should have a shoe, it'd be honest with you, whatever you should have done. It's just, it's just not going to help. The question is, what are you going to do now? There's a lot of things in my life that I should have done. And is there regret? Certainly. Do I kick myself? Absolutely. I'm human. Do I live in it? No. Okay, now I don't. Because when we live in it, we can't move out out from it. So as we go through this, you can wish it were different. But that doesn't change the facts. So let's work with what we have. And I promise you, I'm here for you to support you help you and guide you along the way. So God forbid this, this happens down the road or happens again. You're better prepared. You know, I watched my wife. She spent 22 years she came out of college and she went to work for a company 22 years with the same company 22 years, dedicated, traveled the country doing the work. She she won awards, President's Club awards, multiple ones she ran team, she was really really amazing what she does. Now I'm not saying that just because she's my wife. She is truly an amazing leader, an amazing executive at the stuff that she does, but 22 years with a company. And she survived four or five prior layoffs. But the I don't remember was the fifth or sixth one got her. She got laid off along with 2000 people. And here she was without job and everything. And one of the things to realize is that there's a financial aspect to it. We'll talk about the financial aspects. Man, there is a there's a psychological aspect to it. There's an esteem aspect and worthiness aspect, and she struggled with it. You know, I I never had to deal with it. Because I've been self employed for so long. That, you know, I am my own boss. And you know, my boss can fire me anytime but I'm coming back. So, but I watched her struggle with it psychologically, we didn't struggle with it financially because of some of the things I'm going to talk about here. But I don't It's not lost on me that the threat of this on a family on an individual is far greater than just sight the financial side of it, there is a psychological emotional side to it, just to say, so I'll try to hit on some of that. But I want to prepare you financially for it. Because if you're better prepared financially, it's easier to navigate the psychological and emotional elements of it. Okay, so this is where I want to come from. Now, why is this so important? Well, just looking at statistics, okay, just looking at statistics right now, there has been 15 point 4 million layoffs in the US 15 point 4 million layoffs 6.9 million between August and December of 2022. Okay, so you're talking about a handful of months, where they had almost half the layoffs, 7 million layoffs. 48% of the people in a study said they had what they called layoff anxiety, okay. 47% of employees feel completely unprepared for any kind of layoff. Wow, we're going to try and fix that in this episode, and 30% of those over 55, completely unprepared. Now, that's actually a more dramatic statistic. Because at 55, you now have to deal with trying to get a job at a higher age, which sometimes proves difficult. I don't know why it should, because a 55 year old has a tremendous amount of wisdom and knowledge and experience that they bring to a job. Now in some cases, they say you're overqualified. Some cases, they say you're under qualified because you didn't keep up with the trends. We'll talk about some of that. But my point is, is that the data shows that there's plenty of layoffs going on. The data shows that, that in many cases, you'll be subject to one, at least in your lifetime. So what's the best way to navigate it, I'm going to talk about a framework and a process that I would have you look at. And like I said, again, as we walk through this, this isn't about you judging yourself, I wish I would have done it, I wish you would have done, I need you to start now. Wherever you're at with whatever you have, we need to start now. Because if the layoff happens, you're better prepared. If the layoff doesn't happen, you're better prepared for a financially free future. So it's an absolute win, no matter what happens. Let's just look at this, this framework as as we move forward. And that first framework, the first piece is this, I need you to start understanding and looking at your expenses. This is a time to get very critical about your expense review. In other words, I want you to get your credit card statements, I want you to get your checking account statements, I want you to look at every category. Now I'm not telling you to cross it out yet. But I want you to categorize those things that our wants. And those things that our needs. The needs are for your survival. They're the roof over your head. They're they're the food in your stomach, they are your health care, their medical, the clothing, the transportation, they're your survival, the bottom level of the Maslow's hierarchy of needs. They're not the luxury items, they're not the the other things, the Netflix, the mani pedi is the technology all that stuff, those are wants, and it's totally fine to have a bunch of wants. But in a time, where you need to be critical with every single dollars, why we use cash resource planning, with our clients with my elite, my master's in the affluence blueprint is to make sure that every dollar has the proper job description to do the right things to make sure that you find your path to financial freedom, the the most effective, efficient way possible. And so it's in these times that you start to look at all the needs and say these are the things that I need survival. These are the things that I want. And now you look at the ones and say, Do I still want them? Or is it just in case? I wanted them a month ago, six months ago, a year ago? And now I'm still paying for it. It's a time to stop subscriptions. Is it time to change some things? Is it time to call your cable company and negotiate? Trust me everything is negotiable. Okay, to call and ask for a better fee. Otherwise you might change to do some things to save you money. This is the time to do it is to I want you to review every single dollar that goes out and look for places to find additional cash by eliminating by changing by negotiating by mediating by doing some things to bring some additional cash to you in the sense of not sending it out not paying the bills that you don't need to pay by stopping it. Okay. Hey, I actually do an annual expense review, as I do my tax planning for the end of the year, and I'm looking towards the next year, I do an annual expense review. And I see, am I still using the software? Am I still using the subscriptions? Do I need them? Does it make sense? Or I want to cancel? Do I want to renegotiate them? Now, here's the thing, I want you to take whatever savings you come up with, I don't want you to go spending it somewhere else. I want you to take that savings and I want you to transfer it automatically every month. So you're still putting the money out same money out but it's coming back to you wanted in a high yield cash account, high yield cash account only. That's a savings account that's separate apart from your check again, if it's in your checking account, the temptation is to spend it, it's there I can spend it nope, take it out of the checking account, put it in a high yield cash account. High yield cash account is going to get you about four and a half percent right now maybe 5% right out depending where it's at three characteristics of a high yield cash County, it must be 100% insured specially after the banking crisis are watching some of these banks fields 100% insured. Now there are some places like where I have my high yield cash account is there insured up to 3 million bucks. Okay. But I want 100% insured, I want it 100% liquid so so meaning that I can get access to the cash within 24 hours. I don't have to wait weeks, it's not locked up from once it's not locked up for a year, I can get access to 100% Liquid number number three, there are no fees or expenses, they are not going to charge you to have hold of your money. So insured, no fees and fully liquid. That's it. So I want to move that into a high yield cash cow any savings you have goes in Ohio cash cow because that leads to number two. Number two is about increasing liquidity. The more liquidity you have access to cash to sustain yourself should you get laid off, the better off you will be. Okay. This is why we people will call it an emergency fund, you know as part of the wealth priority ladder that we teach our our elite center masters in our affluence blueprint, we talk about the wealth prior priority ladder. And at the at the base level, we talk about a comfort fund. But more importantly, we want to get you into what we call a peace of mind fund. Some people call it emergency fund, I want you to have nine to 18 months depending on your search situation, nine to 18 months worth of cash available to you in a high yield cash cow. Okay? You may not be there right now, you may not even get there for a little while. But I need that in your head. Because the more liquidity you have, the more you can navigate the downturn and not compromise your values, not compromise getting a job that you don't necessarily want. It gives you a little more breathing with your oxygen during a downturn. Now, you might say well, now I wish I would have done this before your right would have been any time investing savings and building wealth is always better done years ago. But we're here today. So we start today. It's okay. I'm okay with it. All right. So increase your liquidity. Number three, I want you just start to look at your income options. There are things that you can do that you have strengths, you have talents, you have skills, and sit back and say what can I do to increase my income. The other thing that can happen even though your organization your company might be looking at at a possible layoff that you can go in and say how can I increase my value? So I'm in disposable to the organization. Too often we think that we should get paid and compensated based on time served, whether you're selling hours for dollars, or you spent time in employment. You know, I'm sorry, this is gonna be hard for some people to hear. But just because you've been employed for with a company for a decade doesn't entitle you to more compensation. We are in a value exchange economy. What entitles you to more compensation is to solve bigger problems and provide more value. They will pay for that. They will keep you on board for that. So what problems can you solve that others aren't solving? How much can you create more value that other people aren't creating? Because that gives you income options and it gives you staying power? Okay, hopefully that makes sense. That leads to then taking those income options to the skills and the things that you have and start to look at okay. Are there side hustles or gigs that I can do with my town skills and strengths that can bring in more income because here's why this is important. If you have multiple sources of income and I have been I've said this for a while Having multiple streams of income is no longer a luxury. It is a requirement. If you truly want to be financially free, financially secure, financially independent, you cannot be dependent on a single stream of income, whether that single straight stream of income is your salary, your business, it doesn't matter. So what I want you to do is start looking at how you create additional streams of income in your world, that then makes you less dependent on a single stream of income. So if, if God forbid, they give you a severance package and say, We're debt, we're downsizing, and we're letting you go, you still have some income to supplement yourself, you're not, you didn't go from something to zero, you went to something and something above zero. That's the thing that we need to look at. Now, that leads me to this, this other piece, which I mentioned already. And that is, I want you to focus on value versus income, the more you can increase your value in the eyes of the people you serve. The higher they're willing to pay you, the more they're willing to stay with you, the more they're willing to keep you on board because they look at you and go, This person is creating a ton of value. One of the things that I did when I was at the big consulting firm in downtown Los Angeles, okay, I had the opportunity I was on fast track a partnership, before I left there, I had the opportunity to do things that other people didn't. And the only reason I was given the opportunity, and why it was growing so fast. And my salary was going so fast was because I was I was that person, that when a job came up a project came up, that was unusual that other people didn't want to take on or they were unsure of how to tackle it. I said give it to me. So I was solving problems that other people weren't willing to solve or didn't understand how to solve it weren't willing to tackle it. I said, No, no, just give it to me, I'll figure this thing out. And it's kind of I have been known as a problem. I'm a fixer as my wife says I, I fixed problems for people on and everything. But the point being is that what that did is it made me much more valuable to the firm to the company, then other people, which kept me on board, which got my salary increased more readily. And when it came down to potential downsizing, they said, Mel is more of a utility player and he's gotten more value compared to to someone so so we're gonna let someone so go, we're gonna keep Mel. Okay, that's what I want for you. The way you do that is to look at how do you increase your value in the marketplace, in your employment, and the things that you bring to the table, that's going to be skill development, it's going to be execution, that's going to be communication, that's going to be doing things that are out of the norm of your job description to set yourself apart. Hey, understand, then the last piece of this is that a little adds up to a lot. Okay, all you're looking for is just a little bit of breathing room, just a little bit of something that's going to carry you through, okay, when you have that, that's what's going to allow you the latitude, and the ability and the oxygen to breathe. Okay. Now, let's say that you do all of this stuff, and you still get laid off. So what I want to do is walk you through some things to consider. There are 12 things I want you to consider. If God forbid you were laid off. So the first thing is to understand this, if you're laid off, I want you to get a layoff letter in writing. Okay? I want it in writing. So you have it documented and you you can get the rationale for the layoff and all that stuff. Because if you go to another employee, employer, potentially you want to make sure that they are clear that this was a mass layoff and it wasn't because of performance. It wasn't because of something you did, and you'll have that layoff letter that can do it. Now, I want you to look at the letter, the terms and what they say in there, and I want you to be clear and protect yourself. Then, the second piece of this is I want you to negotiate your severance, everything's negotiable. They're laying you off anyways, you might as well ask, and the higher the value you are to the organization, the better negotiating power you have ie they may still lay you off because even though your Higher, higher valid, but they will feel more apt to try and take care of you or do some of these things. Number three, as hard as it is, I want you to file for unemployment. It takes a while to get this thing in play and get things in in a process because I want cash coming in. In addition to whatever you have set aside to give you a little more room to breathe, because, like I said, something like this happens, it's emotional. So filing for employment is important because it's going to give you some cash coming in. And that cash coming in is going to give you a little bit of oxygen, because there's going to be a time where it's emotional, you're going to feel bad, you're gonna feel horrible, you're gonna blame yourself, you're gonna look at things you did. It doesn't serve you but we still have to navigate through it, we have to move through it. And the more we have cash coming in alongside with the the cash you put aside, it will be much better for you, in the long run to give you that now, have a plan. This is important. Have a plan for your health insurance, what's going to happen when your benefits your health insurance. Listen, here's the interesting thing. When Stephanie got laid off, right before I got diagnosed with the cancer, now our health insurance was through her company. And what we decided to do, and I don't know why we did this, we decided to take on the cobra, which was expensive was like a couple grand a month, we took on the Cobra to keep the good insurance that we had. Thank God we did. Because a couple months after that I got diagnosed with the cancer. And I had the opportunity to get the team of doctors in place to cover me having a plan for your health insurance, your family's health, health insurance in this transition period is huge. As part of the negotiation with your severance, make sure that you have it dialed in II know what you're going to do to make sure that you guys are covered, more bankruptcies are created through medical bills than any other reasons. So I don't want that to be you make sure that you're you're thinking about your medical insurance, if this comes into play, ask for the number five is to ask for a reference or feedback. And what I would also do along with this, the reference or feedback is nurture your context. And you actually the problem is that most people will wait till they get laid off. To nurture the conscious, we should stay in contact with our industry sources and the people that we want to work with on an ongoing basis. So when it comes time, or if it comes time, you start to look at contact him and it's not out of the blue, you've already had conversations with them. So nurture those contacts. Number seven, look at your 401 K options, let me be really clear here. Your 401k options, this is dried out because that one stops your financial freedom growth, two is going to trigger attacks, three is going to trigger a penalty, you will end up with 50 cents on the dollar, it is the absolute last dire need last dying breath, you're gonna pull that money out, okay, you're gonna leave the money in the 401 K to grow, you're gonna find another way to make it work, if you can. Now, when I say review your 401 K options, they're may, they may require you to to roll it out to an IRA, which you can, they may not require you to roll it out to an IRA, which you don't have to. But a 401 K at a company that you're not at, you got to look at the costs associated with it. Because if there's a lot of fees in there, then maybe you're better off rolling it out to a four two to an IRA. Because then you have lower fees, too. If you don't have a lot of investing options in that 401k rolling it out to an IRA gets you more investing options. Now you don't need to do that right away, they'll give you the timeframe to do it. Because if you got employed with another company that had a 401 K, you might actually be able to roll that to the company's 401k If they have good options and low fees. But point being is you have latitude to do some things with your 401 K or your retirement at that company. without triggering tax without triggering penalties and giving you the more offer more options and lower lower costs. You may need someone to look at it with you and help you with that. But know that you're not required to leave it there. And in some cases, you are required to take it but you're not required to leave it there and you have options. Look at those options before you make a big move. Okay. Number eight. I just want you know, it's interesting. I want you to create a brag book. What have you accomplished? How have you accomplished it? What are the keys what are the things a brag book, this isn't about ego. This is about you understanding and valuing the things that you have accomplished for the people that you have served. Create a Brand Book. So when it comes down to interviewing you may not be giving them the brag book, but it's it's re enforcing the value you're bringing to the table of a new employer a new job, a new endeavor, if you will, too often. We remember all the negative stuff the stuff that isn't good. It's maybe we need to remember some of the good stuff that we've done in a long career, we tend to forget. So we ought to be building this brag book all along. Okay, recognize the things that you do. Number nine. Number nine, is checking with yourself. This one's a big one. How are you feeling? What are the emotions going on? There might be anger, there might be resentment. There might be fear, it might be all of the above. It's okay. It's okay. Don't invalidate them. You're gonna go through a mourning process. We just don't want to live in the mourning process. And away, we don't live in the mourning process as we start to do a few things for ourselves, do some things for yourself. Maybe you just need a weekend to chill. Maybe you need a spa day. Maybe you need to go for a run. What things can you do for yourself that you know are gonna make you feel good? Make you feel empowered, get you to feel better? To get you more directed, more focus? What are the things that you can do for yourself? Ask for support. Ask for people that that can help you. Look, no one's gonna judge you. I certainly wouldn't have a feel for you. You know, a lot of these laughs It's not it's not anyone's fault. So don't blame yourself, don't beat yourself up. Now, at the same time, I want you to think about how can you skill up to value up? Are there skills that you can acquire pretty quickly or that you should have acquired to increase your value. So when you go to another interview, or another endeavor or another job, you have more value to offer? The more remember, we're in a value exchange economy skill up to value up when you skill up to value up your values up, you become more in demand you more become more desirable, more hireable, more, more of what they want. And then the last thing in this, no matter what, just remember, it's not personal. It feels it. Trust me, it feels it. But it's not personal. They made a business decision. When they laid off 2000 People from what when my wife was part of that they weren't specifically looking at Stephanie and going, Yeah, your God. I mean, they did, but was part of a 2000 person group. It wasn't personal against Stephanie, they made a business decision. Now, here's the interesting thing, she's in a far better place, doing far bigger things, making far more money and being far more fulfilled. So in the end, it was better now going through, certainly wasn't great. But remember, isn't personal. So with that, I kind of start to look at this. There with uncertainty in the economy, with people trying to tighten up with rising interest rates, there is a potential for more layoffs. I don't know if it's going to happen. And it depends on the industry, the geography, the company, but it could happen. Hopefully, I've given you a little bit of a recipe to prepare yourself that if it does happen, you're in better place. But it is also a recipe that if it doesn't happen, you're in a better place. It starts you on this journey to financial freedom up the wealth priority ladder, to move to a place where you should be. And where I want you to be is where you are in a place where you are work optional, that you get a chance to decide and have choice and that you're working because you want to not because you need. You're working for you the impact and the legacy you're creating, and not the bills you're paying. And so ultimately, that's where I want you to be. It may take some steps and some time to get you there. But we'll get you there if you stay on the journey. And know that you're not on this journey alone, no matter what happens. I'm here for you. I'm here to help. I'm here to guide you as best I can. If you have questions you can come to me and ask Mel Leave me your questions. I'll bring it on an episode or I might even bring you on have the conversation. The key is this. I want you to be on the journey towards financial freedom. No matter how distant it may feel today. It will get closer if we start on the journey today. And know that every step of the way. You're in this journey with someone who cares in this process. Alright, I look forward to seeing you on the journey. I look forward to seeing you grow I look forward to seeing you soar and until we see each other again on another episode or another show, or out on the road. Always, always strive to live a life that Cheers. Thank you for listening to the affluent entrepreneur show with me your host Mel Abraham. If you want to achieve financial liberation to create an affluent lifestyle, join me in the affluent entrepreneur Facebook group now by going to, and I'll see you there.

Importance of preparing for a possible layoff
Statistics on layoffs and layoff anxiety
The Framework for navigating layoffs
Categorizing needs and wants in expenses
Increasing liquidity
Creating income options
Exploring side hustles and gigs
Solving bigger problems and providing more value
Building breathing room and resilience
How to manage a layoff
The recipe for financial security and freedom