Nine Financial Moves to Make a Layoff as Painless as Possible

Headlines about layoffs have been pervasive throughout the year, as major companies and organizations across the country have been tightening their belts. Through August 2025, nearly 900,000 job cuts have been announced, the highest year-to-date total since the COVID year of 2020. Some of the hardest-hit industries have been technology, pharmaceuticals, financial services and energy, with companies citing adverse economic and market conditions as well as efficiency gains made through artificial intelligence.
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Meanwhile, roughly 300,000 federal workers have been laid off this year due to government cost-cutting measures.
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At the personal level, a layoff can be painful, disrupting your career and causing a potentially serious setback for your financial goals. But while losing your job may be out of your control, there are many things you can control to minimize the damage. Some smart financial steps—before and after the layoff—can help you make sure it’s only a bump in the road, not a devastating derailment.
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To help you get started immediately, we’ve developed the following checklist of financial priorities to address as soon as possible.

If You Think (or know) a Layoff is Coming

If you receive notice of a layoff, it’s critical to gather as much information as possible to develop a clear picture of what your income and expenses will be after separating from the company. You may receive severance pay, which is often calculated based on your current salary and how long you’ve been with the company (for example: minimum of four weeks’ pay, plus an additional week’s pay for every year of service). Your severance package may also include ongoing benefits such as health insurance and other insurance coverage for a limited time (more on that later), or career transition assistance.

Here are nine valuable tips to help you navigate a layoff:

• Assess your situation. Review your bank and investment accounts to get a full understanding of your current financial resources and how you might use them to support yourself during a period of unemployment. If possible, learn as much as you can about how much severance pay you might receive based on your years of service, along with any pension payouts. If you’ve also earned equity compensation such as stock options or RSUs (Restricted Stock Units), make sure you understand the terms for vesting and payout.
• Delay any big (non-essential) purchases. Without a stable income, it would be wise to put off major discretionary expenses until you’re back on solid ground. In other words, now is probably not the right time to take a luxurious vacation, remodel the kitchen, or buy a new boat.
• Shore up your emergency fund. If you’re still earning a paycheck, consider funneling some of it toward a high-yield savings account that can provide a financial cushion if and when you do lose your job. Most advisors recommend stashing away 3-6 months of living expenses but lean toward the high side if you’re expecting a layoff.
• Create a plan for your 401(k). If your emergency fund is in good shape, take advantage of your employer-sponsored retirement plan while you still can. Contribute at least enough to get the full company match. It won’t help you during a layoff, but it’s free money toward your long-term goals. Consider the pros and cons of keeping the funds where they are or roll them over to another Qualified Plan or IRA. Keep in mind that taking a cash distribution triggers ordinary income taxes and could result in an early withdrawal penalty.  Make sure to consult with a financial professional if you have any questions on what makes the most sense in your personal situation.
• Research insurance alternatives. Don’t wait until your last day at work to scramble for new insurance plans—make a plan in advance and be ready to pull the trigger. Health insurance is probably your top priority, and you can start looking into costs for COBRA (which will cover you for 18 months after an involuntary separation), ACA marketplace plans, Medicare (age 65+), or moving to a spouse’s employer-sponsored plan. Beyond major medical benefits, make plans to continue other important coverages you may receive through your company, such as life insurance, long-term care, dependent care, and disability coverage.‍

If You’ve Recently Lost Your Job

• Revamp your budget. Communicate openly and honestly with your family. Let them know your financial situation has changed, at least temporarily, so their spending habits may need to change too. Review your monthly expenses and debt obligations and start finding places to cut back on non-essentials. Find ways to reduce expenses (at least temporarily) such as lawn service, your premium TV package, and food delivery. The savings can add up quickly.
• File for unemployment. If you weren’t at fault for losing your job, you’re probably entitled to unemployment benefits after your severance pay runs out. Depending on your state laws, unemployment could replace a substantial portion of your income (typically 40-60%) for up to 26 weeks.
• Don’t make hasty decisions. If you’re falling behind, it may be tempting to raid your retirement accounts. But if you’re under 59½, you’ll be hit with income taxes plus a 10 percent early withdrawal penalty, not to mention missing out on years of investment growth. You’ll also want to avoid selling off stocks or other investments that might trigger capital gains taxes or derail other financial objectives. Make sure you check in with your financial advisor (schedule a complimentary meeting if you don’t have one!) to help you make the best financial decisions to stay on track toward your long-term financial goals.
• Keep debt at bay. Draw on your emergency savings to handle unexpected costs and put away your credit cards if possible. High-interest debt can compound and continue to haunt you long after you’ve found your next job. If necessary, you might consider selling off some luxuries to pay off existing debts. And if you must borrow more to stay above water, consider a lower-interest home equity loan or line of credit.

No matter how prepared for a layoff you might feel, it’s always a good idea to get professional advice from an experienced financial advisor. In the short term, making some strategic adjustments may allow you to be more selective during your career transition. And the work you do now can help you build a stronger, more resilient financial framework that can benefit your family for years to come. Reach out to an experienced advisor and let our teams at Quotient Wealth Partners help you take control of your financial journey.