By Ihor Tymonchuk in Layoffs —

How To Prepare For A Layoff: 20 Smart Moves

How To Prepare For A Layoff: 20 Smart Moves

Layoffs are stressful, but they do not have to catch you unprepared. With some focused financial planning, smart use of benefits, and an early head start on your job search, you can protect yourself and bounce back faster.

This guide walks through 20 practical steps to prepare for a potential layoff - from shoring up your finances to building a job search system powered by Fitly.

How to prepare for a layoff

When rumors of cuts start circulating, time becomes your most valuable asset. Use it to:

  • Stabilize your finances so a loss of income does not turn into a crisis
  • Understand your legal rights, benefits, and equity
  • Maximize your health and insurance coverage while you still have it
  • Quietly build momentum in your job search before others start competing with you

Manage your finances

Your first priority is making sure you can comfortably cover essential expenses if your paycheck stops. These steps help you build a cushion and reduce risk.

1. Build an emergency fund

A dedicated emergency fund gives you breathing room if you are laid off. Aim to save at least 3 to 6 months of essential living expenses - housing, utilities, groceries, insurance, and transportation.

If you are in a relationship, consider a joint emergency fund that both partners contribute to. Decide on a fixed percentage of each paycheck - for example, 10 to 15 percent - and automate transfers to a separate savings account. Treat this money as untouchable except for genuine emergencies.

2. Pay off high-interest debt

High-interest debt, especially on credit cards, can quickly become unmanageable if your income drops. While you are still employed:

  • Prioritize paying down credit card balances and other high-interest loans first
  • Avoid adding new non-essential purchases to your credit cards
  • Consider consolidating or refinancing high-interest debt if it lowers your overall costs

Reducing your debt now lowers your monthly obligations later and gives you more flexibility if you are out of work for a period.

3. Create a realistic layoff-ready budget

Build a lean version of your budget based only on essential spending. Then start living by it while you are still employed so it feels manageable if you are laid off.

Identify where you can cut back:

  • Subscriptions and memberships you rarely use
  • Takeout, delivery, and discretionary entertainment
  • Upgrades or “nice to have” purchases that can wait

Practicing this budget early helps you grow savings faster and ensures you can switch into “layoff mode” without a shock.

4. Build additional income streams

Having more than one way to earn money makes a potential layoff less disruptive. Consider:

  • Freelance work or consulting in your current field
  • Offering a service you are skilled at, such as tutoring, design, or coaching
  • Launching a small digital product or tool
  • Creating content that could eventually be monetized

Check your employment agreement to ensure side work is allowed and avoid conflicts of interest. Even a modest second income can significantly reduce the pressure if your main role disappears.

5. Avoid impulse shopping and major purchases

When layoffs are on the horizon, financial discipline matters more than ever. Delay large discretionary purchases such as new furniture, luxury items, or expensive vacations. Focus on necessities and essentials, and give yourself a 24-hour pause before non-essential buys to avoid impulse spending.

6. Take advantage of current financial perks

While you are employed and your income is stable, explore any financial advantages you can lock in now:

  • Ask your bank about lower-interest credit options you might qualify for
  • Review your credit card for potential limit increases or promotional rates
  • Check whether you have access to financial counseling through your employer benefits

It is often easier to secure credit or favorable terms when you are still employed than after a layoff happens.

Read your key documents

Knowing your rights, benefits, and what you are entitled to is critical before any potential layoff conversation.

1. Review your employee handbook

Your employee handbook may outline how your company handles layoffs, severance, unused vacation payout, bonuses, or notice periods. Re-reading it now can help you understand what to expect and what questions to ask if you are affected.

You may also spot benefits you have not fully used yet, such as wellness stipends, training budgets, or expense reimbursements you can still submit.

2. Research employment insurance and labor laws in your area

Take time to understand the basics of how unemployment benefits work in your region:

  • Eligibility requirements for employment insurance
  • How benefit amounts are calculated
  • Waiting periods and how long benefits can last
  • Local labor laws around notice, severance, and termination

Having this knowledge in advance helps you respond calmly and strategically if you are laid off, and it can put you in a stronger position when negotiating a severance package.

3. Understand your equity and stock options

If part of your compensation includes equity, stock options, or restricted stock units, carefully review the terms:

  • What happens to vested and unvested equity if you are laid off
  • Whether there is a deadline to exercise vested options after termination
  • Any tax implications linked to exercising or selling equity

Document how many shares or options you hold and consider speaking with a qualified financial professional if you are unsure how to maximize their value.

4. Download key records and pay stubs

Before any potential termination, make sure you have copies of:

  • Pay stubs and tax forms
  • Employment contracts or offer letters
  • Performance reviews and promotion letters
  • Any documentation of major achievements or awards

Some companies cut access to internal systems immediately after a layoff, so save what you might need for future job applications, background checks, or income verification.

Use your insurance and benefits wisely

Health-related expenses can be costly without insurance. While you still have coverage, make sure you are using it fully and strategically.

1. Schedule your annual health check-up

If you are due for a physical or routine check-up, book it now. A comprehensive visit with your doctor can address any lingering concerns, update prescriptions, and ensure you are in good health as you move into a new job search.

2. Refill prescriptions and plan ahead

Talk to your doctor and pharmacy about refilling or extending prescriptions while they are still covered under your current plan. If possible:

  • Ask about 90-day supplies of essential medication
  • Explore generic alternatives that cost less out of pocket
  • Clarify how refills will work if your insurance lapses briefly

Having an adequate supply reduces stress if there is a gap in coverage after a layoff.

3. Use remaining health benefits

Review your benefits portal and insurance documentation to see what is still available to you this year. Consider using any remaining coverage for:

  • Dental cleanings or necessary dental work
  • Vision exams or updated glasses and contacts
  • Therapy or mental health support
  • Specialist visits you have been postponing

Taking care of your health now can prevent more expensive or disruptive issues later, especially during a job search.

Start your job search before the layoff

The earlier you begin your job search, the more options you will have. Treat this as a quiet, proactive career move rather than a reaction to bad news.

1. Capture and document your accomplishments

Before you lose access to company systems, collect evidence of your impact:

  • Screenshot dashboards that show metrics you improved
  • Save anonymized reports that highlight your results
  • Document specific numbers - revenue generated, leads closed, projects delivered, efficiency gains, or customer satisfaction improvements

Store this information securely and privately, in line with company policies. These details will be invaluable for writing strong bullet points on your resume and showcasing proof of impact in interviews and on LinkedIn.

2. Update your resume with your most recent role

Do not wait until after a layoff to bring your resume up to date. While you are still employed:

  • Add your current role, responsibilities, and achievements
  • Quantify your impact using numbers, percentages, and clear outcomes
  • Remove outdated or irrelevant experience to keep your resume focused

To speed this up and ensure you highlight the right skills, upload your resume and target job description into Fitly. It will analyze the match, surface missing keywords and competencies, and help you rewrite bullet points so your experience aligns tightly with what employers are actually asking for.

3. Tailor your resume to specific roles

Sending a generic resume to every opening puts you at a disadvantage, especially when many candidates are entering the market at the same time. For each role you care about:

  • Compare your resume against the job description
  • Mirror the language of critical responsibilities and requirements
  • Highlight directly relevant projects and achievements at the top

Fitly automates this process by extracting key skills, responsibilities, and qualifications from each job posting and showing you exactly where your resume is strong or weak. With a few guided edits, you can quickly generate tailored versions that align with applicant tracking systems and hiring manager expectations.

4. Quietly optimize your LinkedIn profile

Even before a layoff, you can make your LinkedIn profile more attractive to recruiters without publicly signaling that you are job hunting:

  • Update your headline to reflect your role and core strengths
  • Refresh your About section with a concise, outcomes-focused summary
  • Add measurable achievements and key projects under each role
  • Ask trusted colleagues or managers for recommendations

You can also start posting occasionally about topics in your field, sharing insights and wins in a professional, non-sensitive way. This raises your visibility without referencing layoffs or internal company issues.

5. Apply to roles while you are still employed

There is often a bias in favor of candidates who are currently working, and long resume gaps can raise questions. If layoffs seem likely, begin sending out high-quality applications now:

  • Identify a shortlist of companies and roles that genuinely interest you
  • Use tailored resumes for each application rather than a single generic document
  • Leverage your network for warm introductions whenever possible

Getting interviews started before a layoff can significantly shorten your time between jobs.

6. Track your applications and outreach

A serious job search requires structure. Instead of relying on memory or scattered notes, create a simple tracking system to monitor:

  • Roles you have applied to and when
  • Versions of the resume used for each application
  • Hiring manager or recruiter contacts
  • Interview stages, follow-up dates, and action items

Pairing a disciplined tracking habit with a tailored-resume workflow gives you a clear view of which strategies are working and where to focus your energy. Because Fitly is built to align your resume to specific job posts, you can quickly see which applications are best optimized and adjust weaker ones before applying.

7. Rehearse your job interview skills

When many people are applying for the same roles, strong interview performance becomes a key differentiator. Start preparing now, before your calendar fills with back-to-back conversations.

Focus on:

  • Practicing answers to common behavioral questions using the STAR method - Situation, Task, Action, Result
  • Preparing concise stories that illustrate your top 5 to 7 accomplishments
  • Rehearsing how to talk about a layoff in a calm, confident, non-defensive way
  • Drafting thoughtful questions to ask interviewers about the role and company

Consider recording yourself or practicing with a trusted friend to refine your delivery and body language.

Looking for a new job after a layoff?

A layoff can feel personal, but it is often the result of business decisions beyond your control. What you can control is how you respond and how quickly you move toward your next opportunity.

Fitly helps you turn this difficult moment into a structured, strategic search by:

  • Analyzing your resume against specific job descriptions to reveal skill and keyword gaps
  • Suggesting targeted edits so your experience matches each role more closely
  • Highlighting how your achievements align with the responsibilities and qualifications employers care about

Instead of guessing what to include on your resume or rewriting it from scratch for every posting, you can use Fitly to adapt your existing experience to new opportunities with precision and speed. That way, when layoffs hit, you are not starting from zero - you are already positioned as a strong, well-matched candidate for your next role.