9 Ways to Cope with Layoffs
A stock analyst's view
As all of you are aware, there are many layoffs, most visibly in high-tech and finance. I want to share some tips on how to cope with layoffs.
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1. Can't Control the External
You cannot control external factors.
Famous value investor Howard Marks points out that the financial market is a pendulum and it always overswing in both directions before arriving at an equilibrium.
For a lot of you, for the first time in your life, you witnessed the extreme up in the financial market during the last few years. And of course, it all came crashing down, and now you are witnessing the extreme down. That’s just how markets work, whether it’s the financial market or the labor market.
Jay Powell decides whether the printer is on or off. Companies go through greed or fear. They blitz scale when capital is cheap and then change the narrative from growth at all costs to reaching profitability ASAP.
There is also a lot of herding going on: Oh you guys cut 5% of your workforce, we should do it too as long as we weren’t the first to do it, hopefully, less bad publicity for us right?
That said, you ARE responsible for making things happen for yourself. That means you cannot just give up by blaming external factors.
2. Embrace non-linearity
Career is becoming more and more nonlinear as time goes by. That’s certainly very much embraced by the younger generations today. I know people who got their offer rescinded by investment banks during 08-09, and I know HBS people who worked at Enron during 2000, these folks thought their career and life was over and had to take a dramatic downgrade and “settle” for a corporate role or a lesser bank or consultancy.
A lot of these people concede they would have left those brand name firms after intense work experience for 2-3 years anyways just to end up at the job they currently have. Many found tremendous success in their own field because they discovered their true passion instead of just blindly following their classmates on the same path.
And they worked hard toward their passion instead of slaving for a bank or a consultancy and wondering about their next bonus which is nowhere nearly proportionate to their contribution at work, especially early on as a junior.
For the younger candidates, if you felt you missed the boat in a once-in-ten-year downturn, and believe me you will have many more in your career because boom and bust is just human nature. You can always use an MBA to reset.
MBA is a whole giant discussion that I have to plenty say as I watched so many pursued MBA for the wrong reason and received very poor ROI. But at least the option is there for you if you want to pursue investment banking and management consultancy, hopefully not just for the sake of saying you have once worked for Goldman Sachs or McKinsey.
3. Things Always Work Out
Part of it is it just does. Part of it is your internal adjustment to reality.
And you only need one job: You can only do one job anyways. As long as you stay persistent and focused on the roles you target, someone eventually will give you a chance. I can speak from experience many times in my life.
And if you have never been laid off in life, this IS your lowest point in life. I am saying it’s a good thing because now you are more prepared for future setbacks in life, which inevitably will happen. Life is never just a straight line up (do a drawing), no matter what family background you came from.
4. Increase Intrinsic Value
I touched on the point of taking control and making things happen for yourself. One of them is to make yourself more valuable as a laborer. Now you are unemployed, you have a choice of watching Netflix and playing video games or growing as an individual. I suggest you go with the latter.
One way to keep growing is to continue to follow the news of your sector. Employers want someone who is up to date on what’s going on in the industry and who can think strategically as an employee.
By keeping up with industry trends and big events in your industry, you are better prepared to give thoughtful answers and ask better questions during interviews. In a world where AI is becoming more real of a threat than ever, long-term strategic thinking can differentiate: What business issues remain to be solved, which company in your industry is winning and losing market share, and why? Things like that.
Look at the job descriptions of your next job. What are the trending skills required? Is it SQL, BI, or Python? There is a big-time YouTuber for everything you want to learn now. Pick up a skill or two to make yourself stand out against the pack. You have all the time now to learn skills that you might have to learn on the job anyways. Might as well do it now. It will make you a more competitive candidate and increase your bargaining power when you talk numbers with your next employer.
Read. You can check out my sector reading list in the video description below. Get smart on your industry’s history and present, you never know what part of that knowledge can come in handy in your career.
5. Network relentlessly
Networking has many benefits for you: it sharpens your communication skills, which are core to any profession, especially in a client-facing capacity or if you aspire to become a corporate executive.
A good networker has stronger career mobility than one who doesn’t network, especially for high-profile roles which are unlikely filled through the company career portal or through recruiters. Every new connection can improve your chance of getting your next job lead.
The other purpose of networking is gathering intel. Yes, there are Glassdoor and Fish Bowl App, but I found just a few disgruntled employees can make every company on this planet look like a bad place to work. By networking, you develop primary contacts who can tell you what it is really like to work at XYZ firm so you can make a more informed decision.
6. Financial Discipline
When your revenue dropped dramatically, you obviously need to cut operating expenses to remain viable and not burn your cash on your personal balance sheet. It’s time to cut some discretionary expenses to get through the downturn, which is why companies laid off people in the first place – I hope.
Back in the days, you have to drink a latte and eat avocado toast from that fancy artisan coffee shop on your block, no you don’t anymore. Do you have to order meal delivery? At the very least, go pick it up yourself instead of having to pay for some bullshit regulatory response fee. Hopefully, the byproduct is it installs good financial discipline in you in the long run.
7. Get entrepreneurial
This depends on your skill. Get on a freelance platform to see if you can sell your expertise in exchange for cash flow.
The Internet and many SaaS apps have dramatically reduced the barrier to starting your side hustle or even running a real business. If there is something you want to share that just even one person can benefit from, start the business. The goal should not be to make money at first but to do something. It is going to be a transformative experience no matter what the outcome of the business is.
As someone who deals with uncertainty for the bulk of my professional life, I actually guarantee, aka for certain, that you will emerge as a better working professional and person by trying to build a side hustle. It’s also just a good way to take your mind off being jobless. It’s one of those asymmetric risk-reward endeavors, if you fail as a side hustle builder, you don’t lose much because an internet-based business does not require much upfront capital. If your side hustle takes off, you can continue to seek a day job for stability while being the 100% owner of something that grows in value.
I do want to remind you: business success is far from guaranteed. As I have discussed in my prior video on quiet quitting, quoting my hero Youtuber Ali Abdaal (4 million followers on YT), the media likes to portray success as an event when in reality it’s a process. So that’s something to keep in mind. Yes, once you succeed you could work 3 hours per week and make $100k a month, but to get there 1. You have to work longer hours than your day job 2. Your business actually needs to succeed. That leads to the next point, like building a side hustle, finding a job takes time.
8. Things Take Time
The labor market has high search costs for you and the company, it’s just like dating. Assessing compatibility takes time. Trust takes time. If you get job leads through referral, your referral needs to vet you long enough to have confidence because he or she is taking a reputational risk.
To quote the real GOAT Warren Buffett, you can’t make a baby in one month by getting 9 women pregnant. So stay persistent but beware things don’t happen overnight.
9. Celebrate Small Wins
During this dark time, I understand you will be anxious to get back to work and feel you are not making progress. That’s not true at all because if you are taking my advice, you are growing as an individual by learning more things and making more connections. Remember to celebrate these incremental data points because the truth is you are progressing, it’s just no one really gets excited about slow and steady growth. But remember all these small and steady growths will drive that big spike in progress, which is when you land a new job offer. So keep on.
If you have been laid off, I am sorry that happened to you. I hope this is helpful and wish you good luck. Like I said before, you will be fine, things always work out.
Thanks for reading. I will talk to you next time.
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