I am sure you might have heard some bad news (or rumors) about ‘Layoffs’ or “Job cuts’ happening in Information Technology industry in the last few months. In previous year we had seen many Top IT companies like Yahoo, IBM, HP laid-off their employees.
Now, Social Media has been abuzz with news of mass layoffs at TCS (TATA Consultancy Services) with some reports suggesting that the number of employees that are affected will be around 25,000. But TCS has repeatedly denied this, stating that the number of employees affected as a result of its “annual workforce restructuring” is a little over 3,000 people.
(So, let us not talk about the number of people that are expected to be laid off. But, one thing is clear that top IT MNCs are for sure re-structuring their workforce.)
I myself have worked in Information Technology (IT) and Business Process Outsourcing Industries from 2003 to 2010. I am in touch with most of my ex-colleagues and friends. Many of them are now in middle-level management roles. What I am getting to hear from them is that “many IT MNCs are restructuring their Human resources.” They are cutting the extra flab by laying off non-performers (or) individuals with more than 10 to 15 years work experience. Surprisingly, many of these IT companies have plans to recruit thousands of freshers. Infact, TCS has plans to hire 35,000 freshers in the next Financial Year.
The main reasons for these layoffs can be:
- IT companies want Higher Margins
- Clients want more automation and re-engineering work to be done to the existing processes or projects. So that more work can be done by less no of employees
- Demand for some verticals like ERP, Product support, Enterprise consulting etc., has reduced considerably and demand for newer verticals like Data Analytics, Cloud computing, mobility etc., is picking up.
Does this signal the end of IT’s Golden Age or should we treat this as ‘Business as usual.’ (Because trimming mid-level employees is a common practice in the IT industry, where the employee pyramid has got skewed.)
The employees who are laid off not only has to go through the mental agony but also has to face some financial challenges. This is worse if the employee is a middle level manager with EMI (Equated Monthly Installments) commitments, he/she has to maintain living expenses, has to bear Kid’s education expenses and some more unavoidable financial commitments.
Strategies/Tips for dealing with Layoffs (Dos & Don’t s)
If you are one of those unfortunate laid off employees or you have clear signals of getting laid off, below are some of the tips/strategies to cope with it.
- Stay professional thought the process. It’s tempting to take out your frustration on your boss. Who knows he may be the first person likely to be a reference for your next job. It is better to ‘leave on good terms.’
- Accept the truth and inform your family members. Do not neglect your health.
- After a layoff, many of us immediately and blindly may dive into the new job search. If possible take some time to assess your current situation, reflect, and refocus. This will put you in a much better position to embark on a well-established job search.
- Understand and analyze your current financial position. Calculate your monthly fixed and variable financial commitments. Weed out those unwanted and avoidable expenses. Trim your monthly living expense. Live within your means. Find out ways to reduce expenses by discussing with your family members.
- Check with your company if there is any severance package. Last year when Yahoo laid off around 500 of its employees, it paid six month severance package. Make use of this money prudently.
- If possible postpone paying off some of the debts you own and do not be in a hurry to pay off the debts using your cash reserves. Try to maintain the debts within a manageable limit. Also, do not be in a hurry to sell your assets. Do not withdraw your EPF (Provident Fund) amount immediately. Suggest you not to touch your retirement savings. These monies should be the last resort. Be strategic while withdrawing your investments. For example, you may want to start with those that have a lower return or savings account that generates little interest.
- Consider taking financial help from family members or friends. Approach them for loans before contacting financial institutions or money-lenders. Try not to take personal loans and loans on credit credits. The situation may worsen if you do so.
- Re-look at your Life Insurance coverage. Check if you have sufficient life insurance coverage. Also re-look at your Health Insurance requirements as many of the employees depend only on Employer’s Health insurance scheme.
- Check your periodic investments like SIPs (Systematic Investment Pans). If you think it is better to PAUSE these then go ahead and temporarily stop these automatic debits.
- Build and maintain Emergency fund (if you are expected to be laid off). Create contingency fund which can be 6 times of your monthly financial commitments. If you lose the job, it may take some months to find a new one. At that point of time, this emergency fund will be of great help to you. So be prepared for ‘unemployment while you are employed.’
- Be open to learn new skills. Keep honing your job skills to stay afloat in job market. Keep exploring and come out of the comfort of status quo. Be open to take up entrepreneurship. You may be really good at something. May be this is the time to jump up and grab the opportunity. “Necessity is the mother of invention.” May be it is the time to reinvent yourself.
- You will be able to stretch your savings if you have additional income. You can consider part-time work while you look for a job. This can be in your area of expertise or your hobbies and other interests may offer possibilities for income. Remember: Your primary job is to find a new job. Any part-time work should allow time and flexibility to actively pursue your job search.
- Get up and Network. Informing your networking contacts about your current employment situation is never a fun task, but it’s necessary. Find an appropriate way to connect with those who will be most beneficial to getting you back on track to employment, as well as creating new networking strategies to expand your network throughout your job search.
Do not forget that there are people around you who love you and who are there to lend a hand. Don’t let your ego stop you from asking your friends for introductions, job leads, or just a shoulder to lean on.
Don’t give up hope. Stay POSITIVE. Layoffs could be just a temporary bad phase in your life. Believe in yourself and the future. With some focus and smart decisions, you can land on your feet and hopefully look back one day at how far you’ve come from these difficult times. Know that transitions are always hard, and know that you’ll come out of it much stronger.
Share your views and strategies on how to cope up with Layoffs. Your thoughts may help someone who needs motivation and is looking for a job.
(Image courtesy of iosphere & jesadaphorn at FreeDigitalPhotos.net)
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