155. Lay-offs may as well be inevitable!

Rama Nimmagadda
5 min readMar 15, 2024
Photo taken by Prateek Kumar Rohatgi in 2023 at Kabini National Park, India

“Hoping for the best, prepared for the worst, and unsurprised by anything in between.” — Maya Angelou

Debating if lay-offs are justified or not is meaningless. Accounting for the consequences of lay-offs in your plans can be very meaningful though.

Of late I have come across a few stories of real people getting laid off after long years of services with their employer. The latest one was of a person of senior management cadre who apparently got laid off by a large Silicon Valley firm, despite his many years of fruitful service and his contributions to developing a product line worth $100 Million+ yearly revenues to the firm. My heart goes out to this person.

From what I understand, lay-offs are on the rise again. While almost all lay-off stories are sad, the culture of lay-offs is not new. I remember waves of lay-offs throughout my career. One good thing is that they always tend to be cyclical. Lay-offs are typically followed by hiring carnivals albeit with a lag. It is my earnest hope that this cyclicality continues and that people get back into jobs soon enough.

But this article is not on the culture of layoffs. It is more about taking our destiny into our hands, somewhat.

There is no point in exasperating that companies do not show loyalty to their employees. That is really a moot point. In a career that spans anywhere from twenty to forty years, it is better to expect one or more voluntary or involuntary breaks and hence account for them in your plans. In a rapidly changing world (I’m incapable of imagining how fundamentally the world will change after full advent of AI), a relentlessly dynamic approach is necessary to build enduring careers.

“Wisdom prepares for the worst, but folly leaves the worst for the day when it comes.” — Richard Cecil

I imagine the biggest impact coming off a lay-off is financial. For, layoffs are otherwise sufficiently normalized, socially. No more social stigma attached. There is also a clear positive too — one will get a break from the listless and the often, stressful rigmarole of corporate life. A lay-off suddenly allows one to spend more time with loved ones, or on hobbies or travel etc. But such options can be taken advantage of only when one is prepared financially and emotionally for such breaks.

All too often, one associates a sense of personal validation from the job they do. Anytime you hang your sense of self on an external factor such as job title or role, all you have done is set yourself up in a fragile way.

Coming to being prepared financially, a level of hygiene has to be maintained. Personal insurance policies (separate from company provided ones) and emergency funds (covering expenses of one to two years) are absolute musts. Once I realized this need during my own career, initially I could set aside funds to cover 3–4 months only but in time, I was able to increase it to cover about two years.

It takes serious intent to maintain this kind of financial discipline. When you are earning well, it is tempting to spend money on desires, it is tempting to invest money in exciting avenues like bitcoin, angel investing, start-ups, hedge funds, stocks etc. Setting aside meaningfully large emergency fund may seem like waste of opportunity. Well, hygiene is boring!

Also, naively getting caught in golden carriages is never good. Your employer may pay you above market salary because you are proficient in some proprietary knowledge that your employer relies on. But sooner rather than later, that proprietary knowledge will become obsolete. It does not make sense to develop comfort in those situations. Keeping your skills and/or capabilities relevant to the market is your responsibility for yourself and your family.

“First ask yourself: What is the worst that can happen? Then prepare to accept it. Then proceed to improve on the worst.” — Dale Carnegie

Over a medium to long run, all firms will only show loyalty to their own financials. Afterall, “management” of the firms are also employees and like all other employees, they will also look to increase their own salaries and bonuses. Increasing revenues of the firm and or reducing costs are how they get rewarded. Occasional slogs involving long hours to get projects across tight deadlines are part of everyone’s job responsibility. Thinking that because of your hard work, your employer will show loyalty to you is being naïve. If you consistently sacrificed family time for work for a long time, it just means that you prioritized work over family.

So long as you are not constantly upgrading yourself or not being critically relevant to your employer, you are at an increased risk of lay-offs. Being relevant means being valuable vis-à-vis the compensation you draw. Also, benchmarking against your company standards is not good enough, you should strive to be “relevant” in the wider job market.


“Heads I win, tails I don’t lose much” — Mohnish Pabrai

Despite all your right efforts in progressing your career, you should still be prepared for breaks in your career — these breaks need not always be involuntary like a lay-off. Preparation should include setting aside monies for your expenses during the break, preparing your family and friends to tolerate your (over) extended presence and also identifying things (skills to learn or hobbies to pursue) to do to occupy your time. Depending on the stage of your career and the nature of the industry you work in and macro-economic conditions, you should be prepared for a career break of one to two years. In other words, plan as if lay-offs are inevitable.


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A bit on my background

I help people make better decisions.

I coach people on “Making Better Decisions”, “Financial Intuition” and “Building Great Careers”. I’m open to run sessions on these topics in institutions — this will help me create larger impact.

I’m also an Investment Advisor (RIA) registered with the Securities and the Exchange Board of India (SEBI). As an RIA, I analyze and prepare financial plans to help people achieve their financial goals.

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