Career Development

What Does Laid off Mean? (And How To Deal With It)

June 29, 2021

Career setbacks such as getting laid off from a job can create a feeling of rejection. While it may take some time to pick yourself up after a setback, the earlier you can take the next steps, the better it is for your career. Knowing what happens when you get laid off will help you tackle such a situation more confidently. In this article, we explain what getting laid off actually means, if it is the same as getting fired and what to do in the event of a layoff.

What does laid off mean?

Getting laid off from a job means being terminated from your position, with or without a prior notice and severance package. Often, you get laid off through no fault of your own. If you are wondering, "What does laid off mean?", it typically means that there is no longer a need for your current position.

Why do layoffs happen?

There can be various reasons why your company is laying off employees. Here are some common reasons:

  • The company has decided to close down its production operations.
  • The company has to close due to a natural disaster.
  • The company has suffered a breakdown of machinery.
  • The company has experienced a shortage of power or coal.
  • The company has run out of raw materials and other production necessities.
  • The company needs to downsize and cut down on production.
  • The company has decided to restructure and switch to another production mode.
  • The company has merged with or got acquired by another company.
  • The company do not have the funds to pay employee salaries.

Is being laid off the same as getting fired?

Being laid off is not the same as getting fired, although you end up losing your job in both cases. Here are the differences.

Being laid off

Generally, a layoff happens when the company does not need or cannot afford certain job positions any longer. In some lay offs, the employees may be reinstated after the company manages to resume its operations, but in other cases, the work termination may be final.

Getting fired

When you get fired, it is typically because of your poor performance. The company may still require someone to work in your position, but they do not think that you are the right person for it. You may lack the skills and abilities or the diligence to do well on the job. The management may have found you to be dishonest or unreliable.

Apart from poor behaviour, failure to fulfil job expectations and below-par work performance, you can also get fired for violating a company policy, doing something that has harmed the company's reputation or engaging in an illegal act.

Being laid off vs. getting fired

The difference between being laid off and getting fired is evident in the way the HR department will impart the news. If you are being laid off, they will inform you that your job position has become redundant due to the company's decision to reduce the workforce. You may or may not receive advance notice about the impending layoff, and the company may also be laying off employees other than you. If you were with the company for a long period and the company has the finances for it, they may offer you a parting compensation.

If they fire you from your job, the HR personnel will inform you of the exact reasons for which you are being fired. You typically do not receive compensation from the company if you are fired from your job. While you can find employment again in the future, it is generally easier to get a job if you were laid off as opposed to if you were fired.

Related: How to Explain Reason for Job Change (With Examples)

What happens when you get laid off?

When you get laid off, the company's human resources department will inform you that your services are temporarily or permanently not needed and will not give you any further work. You may receive the message in a face-to-face meeting, through a company notice, over the phone or via email. You may be asked to collect your belongings and leave the company premises.

Depending on the company, the HR manager may make recommendations within the company or in the industry to find you another work position as soon as possible. Or they may offer advice on picking up new skills to stay relevant in the job market. They may or may not offer compensation to help you out until you find another employment.

Do you get paid if laid off?

Whether you get paid after being laid off from work depends on the company that employed you, the number of years you worked for them and the employment agreement you have with them. In some companies, you might be eligible to receive a layoff compensation that is equal to 50% of your basic salary and dearness allowance. To get the severance payment, they may ask you to sign an agreement stating that you will not sue or badmouth the company in the future. In others companies, you may not receive a layoff compensation.

What to do after you get laid off?

There are several things you can do to take control of the situation after a layoff from work. Here are a few suggestions that might help you:

Stay calm

Take the time to relax, plan ahead and come to terms with your emotions. Although getting laid off can feel like a terrible loss and rejection from your employer, relaxing allows you to process what happened and helps you mentally prepare for the next steps in your career. It is also important to understand that your layoff may have resulted from reasons beyond your control, especially if your company performed a mass layoff.

Know when you are getting your final paycheck

Before you leave your job, make sure you know when you are getting your final paycheck. It is also important to know whether you can expect a paper check or if you will receive it via direct deposit. While some employers may give you your final paycheck right away, others may delay its delivery. Apart from your regular wages, you may also receive pay for accrued vacation, sick leave or overtime. Speak with your human resources department to verify the date of your final paycheck and to know what amount you are entitled to.

Get important files from your computer

If you are not locked out of your computer yet, take the time to gather your personal files and contact information. You can use these to help with your future job search.

Get references

If you were laid off through no fault of your own, consider asking for references or letters of recommendation from your manager. You can use these references to help you gain future employment opportunities. It also shows your prospective employer that you left on good terms with your former manager or employer.

Consider your options

After getting laid off from work, take some time off to introspect and think about your options. If you enjoyed your job, consider finding a similar job in another company in your industry. If there is a job shortage or you think that a career switch will suit you better, you might consider looking for a job in another industry. Make a list of your transferable work skills and consider which of them may apply to your new industry. You also have the option of learning new skills or updating the existing ones to begin an entirely new career.

Related: How to Get the Job You Want

Update your cover letter and resume

Before applying for a job, update and customise your cover letter and resume to meet the specific requirements of that position. Highlight your work skills, experience and achievements in your resume and expand on these details in your cover letter. Give a brief explanation of your layoff in the cover letter, taking care to not blame or complain about your previous employer.

Related: Work Experience Letter Format (With Sample)

Network in the industry

Reach out to your offline and online network connections to find work opportunities in your industry or in a new one that you are considering. Let the relevant people know that you are looking for a job. When they know you are looking for a job, they are more likely to contact you when they hear of open positions you might be interested in.


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