When Lehman Brothersfiles for bankruptcy protection and Merrill Lynchgets taken over in a hurry, workers far and wide may have reason to get nervous about their own job security.
Worrying won't help; instead, experts say you should be getting your affairs in order, both financially and professionally, so that you will be better positioned for a possible layoff.
“You can’t control the organizational decisions that are happening around you,” says Stefanie Smith, an executive consultant and coach at Stratex, who blogs at coachstef.com. "The only thing you can control is your mindset and your actions."
While it's soon to say how workers will fare at Lehman Brothers and Merrill Lynch , job cuts at financial firms could surpass last year’s record total of 153,105, according to employment consulting firm Challenger, Gray & Christmas, and overall corporate layoffs are likely to top a million for the first time in years.
Hewlett-Packard this week said it would slash close to 25,000 jobs.
Less recently, Starbucks announced 12,000 job cuts, Verizon's wirelessunit 10,000.
Corporate layoffs are just part of an overall job market in decline.
In August, the unemployment rate jumped to 6.1 percent, a five-year high, while the monthly decline in payrolls was greater than expected.
In this economy, few of us seem protected from layoffs, so these tips on preparing for the worse may come in handy.
“It’s really important to pay attention to the layoff rumors,” says Stephen Viscusi, author of "Bulletproof Your Job." “There’s always a grain of truth to any rumor.”
To keep up with any layoff news about your company, Viscusi urges workers to set up Google or Technorati alerts that can automatically send you an email whenever your company is mentioned in an article or on any blogs.
Other, more tangible signs that layoffs may be imminent are when perks, like free dry cleaning, or benefits, like tuition reimbursement or 401(k) contributions, start drying up, says Dennis Grindle, director of the career management center at Southern Methodist University's Cox School of Business.
“Try to spot the layoff coming before it hits,” he says.
You should be actively building an emergency fund if you haven’t already been doing so, and cut down on discretionary spending.
“The basic rule of thumb is to have three months of living expenses in a secure liquid vehicle like a high - yield savings or money market account,” says Alyce Zollman, a financial consultant at Charles Schwab.
If you are laid off, Zollman says consider taking out an home equity of line in credit or selling stocks or mutual funds that are not in a retirement account to provide cash in case of an emergency.
It may be tempting, but don’t withdraw money from your 401(k) or other retirement accounts.
The high taxes and penalties are not worth it, says Zollman.
On the job, make sure people can easily see you are always working hard.
Viscusi says that in some cases all it takes is coming in five minutes before your boss and staying five minutes after his departure.
Now is not the time to lay low and take it easy.
Smith advises employees to approach their boss and say, “I know it’s a tough time, what can I do to support your goals and objectives over the next few week.” Unless you already paid for it, put off going on vacation, says Dale Winston CEO of Battalia Winston Amrop, a global executive search firm.
You want to be seen in the office as much as possible.
Lower Credit Card Debt
Losing a chuck of your income will make paying bills harder, so work on aggressively lowering your credit card debt while you’re still getting a regular paycheck, says Zollman.
Update Your Resume
You resume should always be up to date; if not, then now is the time to start refreshing it.
In doing so, make sure it speaks to the job you want in the future, says Smith, by highlighting the right skills and experience in previous jobs as well as your current one.
“You may find more value in your work history than the last time you drafted your resume,” she said.
When layoff rumors start flying, it's hard to keep a positive attitude, but it may be more important than ever.
“Layoffs are the perfect time to get rid of the grippers,” says Viscusi.
Complaining and contributing to the negative environment won’t help keep your job.
If morale is low in the office, Smith recommends taking a walk and leaving the building during lunch.
Browsing through an electronic store or reading a book can be a good escape.
Communicate with friends, coworkers and family members, letting them know you may be looking for work.
Melanie Holmes, a vice president at recruitment firm Manpower, says that social networking Web sites like LinkedIn and Plaxo are a good way to stay connected with contacts, but you should also be going out to lunch or grabbing coffee with contacts in your network.
Even if you’re in a tough spot, try to help those in your network, too.
“If you help, you’ll probably get helped yourself,” she added.
Have A Backup Plan
Best laid plans aside, you should be thinking about how you will make money if you are laid off.
Holmes recommends picking up a skill you left behind years ago, like plumbing or painting that can add to cash flow while you're looking for a new job. The key is to be flexible and open.
Now, If The Ax Falls
There are a couple of things to remember if you do end up being laid off.
Make sure your health insurance is continued through COBRA, says Zollman, because illness or injury can be expensive and put anyone into major debt.
COBRA laws vary from state to state, but generally an employer will be offering COBRA when laying workers off.
Grindle recommends negotiating a severance package immediately. The first round of layoffs is when the company has the most money to work with
“At this stage you’ve got nothing to lose,” adds Grindle.
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