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Worst Case

April 7, 2009

I have a feeling the layoffs will be hitting my company again in the near-ish future.  Will I be “safe”?  Well, I think so.   My manager seems to be on my side, my “ratings” were really good, my skills are somewhat diverse…  Blah, blah blah.  I don’t know, when layoffs happen, the worst case seems to be something like 10% of the workforce at a time.  I don’t think my performance or skill set is in the bottom 10% (or even 25%) of what my company needs. But I don’t know that for sure.  I think most people who are laid off don’t see it coming.

So yeah, I think I’ll be safe, yet I can’t help to take stock of the worst case scenario.

  • If I get laid off, I get a 60 day notices and some (very minimal since I’ve only been here 1 year) severance pay
  • In California, I qualify for $450/week in  unemployment.  While a fraction of what I make now, it is enough to help out.  I figure a good chunk of this would go towards some sort of COBRA health payments.
  • Starting in June, I’ll pay only $900/mo in rent (opposed to $1425).  If needed, T could pay up to $1000 and I could pay as little as $600.
  • My efund is roughly at 8 months.  And I could obviously use my car fund and any other random cash I have lying around.
  • The job market is extremely tight, but I think there are some jobs out there.  There is a lot of competition, I might have to drive further than I’d like.  But there are some jobs out there for skilled workers.  (Right??)

So that is the worst case, and the worst case doesn’t look all that bad.  In this economy, it is certainly possible that it will take some time to find a job.  And that is scary, and it sucks.  I’ve never been an adult in a recession, and the only times I was job seeking was when I was in pretty high demand.  So the worst case is scary, but everything should still be ok.

I don’t think it’ll come to that, and I hope it doesn’t, but this is the part where I thank the SP of 2-3 years ago for starting up an E-fund when times were good, and the SP of about 1 year ago for deciding to focus even more on cash savings.

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10 Comments leave one →
  1. elcheapofinance permalink
    April 7, 2009 9:50 pm

    I think you have plenty of $$$ to ride it out, no matter what the scenario. I read recently that California extended unemployment bennies another 20 weeks… to (gasp) 79 total weeks? Thank you Ahhhnold!

  2. April 8, 2009 9:06 am

    I worked in financial services in New York City and was laid off the last week in January. In February, I had interviews at four different companies, two gave me an offer and I now work at a better, higher paying job than the one I was laid off from.

    I’m not saying this to brag, but to just to let you know I was in your position- worrying for months that it would be me they would let go. When it was me, I was devastated, I was sure I’d be on the hunt for months and months with this economy. But there ARE jobs out there, and people are still looking for employees in some places. Turns out that getting laid off was one of the best things to happen to me. You have your ducks in a row- it will turn out fine.

  3. April 8, 2009 10:19 am

    Not to be a Neggy, but on the other side of the coin, I’ve been looking for six months now. Not unemployed yet, but the search can potentially take quite some time. Anyway, if any layoff does happen, you’re pretty well set for the amount of time it could take, and you make very well be safe.

    Good that you have that cushion, though, that’s great for peace of mind!

  4. Anonymous permalink
    April 8, 2009 8:09 pm

    It would be quite interesting to myself [and other readers I’m sure] if you posted an “emergency” or “bare bones” budget in which you cut everything that you feel is nonessential. I think this would give us all a good idea of how we can really stretch our e-fund in dire situations.

  5. Anonymous2 permalink
    April 8, 2009 8:12 pm

    @ Anonymous: That is an awesome idea…

  6. April 8, 2009 8:43 pm

    @anonymous & anonymous2: First, just because you are anonymous doesn’t mean I can’t see your IP address, which is the same and I know who you are!!! 🙂

    I think it is fairly obvious the things that could be cut, but ideally, you have enough savings that you don’t run home and turn off your internet the day your paycheck stops coming in. I already spend my money primarily on things I see as very important, so the things that I can cut are somewhat minimal. I think in some dire long term unemployment situation (unlikely!), the best thing to do would be to ride out the lease then find a cheaper apartment– Then, I could live off my boyfriend 😉

    Eating out would go, any clothing that wasn’t interview related would go, groceries could be cut a bit and entertainment would go down. No more wine, just cheap cheap beer. 🙂

  7. April 9, 2009 12:13 pm

    Well I hope your planning for the worst case means it never happens! Isn’t that murphy’s law? My job is quite secure right now, good thing because I’m underprepared for an extended layoff. FYI the max benefit is currently $475 per week, the stimulus includes a $25 per week raise across the board. Also they are subsidizing cobra, which helps with the budget.

  8. SP permalink*
    April 9, 2009 12:21 pm

    I was aware of the COBRA, but not of the extra $25/week. Thanks!

    Of course I hope it does not happen, but to keep myself calm and level headed, running the numbers makes me realize that IT WILL BE OK!

  9. April 11, 2009 4:16 pm

    Yeah, I’d have to agree with you, you’ve got a good buffer and good benefits in case you get laid off. But, I hope you DON’T get laid off. Good luck!

  10. April 13, 2009 8:08 pm

    Layoffs are completely stressful! I understand what you are going through. There have been many layoffs where I work already, 3 of which I worked with on a day to day basis.

    it sounds like you’ve got a bit of cash stored up for times just like these – here’s hoping you don’t have to use it!

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