Surviving a Layoff: What HR Wants You to Know?

Mindy:
Welcome to the Bigger Pockets Money podcast where we interview Tara Pramme and talk about how to handle of being laid off.

Tara:
If you’re happy in your job, there’s no better time to update your resume than right now because you have access to your internal systems, you have access to your past performance reviews, which is likely where you’ve done a lot of really deep thinking about all of those awesome things that you’ve accomplished in the last 12 months, and those are the things that you really want to be highlighting on your resume. And so if you are listening to this and you’re at a company and you haven’t been laid off, like take 30 minutes and go see what those things are that you put on your performance reviews that highlighted all of the awesome contributions that you’ve had and update your resume.

Mindy:
Hello. Hello, hello. My name is Mindy Denson and with me as always is my voice in the calm of the storm co-host Scott Trench.

Scott:
Yeah, some of the news in this episode may come as a nasty shock to some folks unfortunately, but we have a great episode and we’re ready to talk about it, tech layoffs.

Mindy:
Tech layoffs. Yes, tech layoffs and layoffs in general. Scott and I are here to make financial independence less scary, less just for somebody else to introduce you to every money story because we truly believe financial freedom is attainable for everyone, no matter when or where you are starting.

Scott:
That’s right. Whether you want to retire early and travel the world, go on to make big time investments and assets like real estate, start your own business or manage through the tough times that come with losing your job. We’ll help you reach your financial goals and get money out of the way so you can launch yourself towards those dreams.

Mindy:
Today’s guest is Tara Pramme, an HR specialist, and we are talking about tech layoffs. There have been more than 200,000 tech layoffs in recent weeks, and of course they’re big and Facebook is announcing 10,000 and Google is announcing 12,000 so that’s what makes the news. But there is a very real possibility that there’s a recession coming and there’s a very real possibility that your company might be doing some layoffs too, regardless of the sector. So we brought Tara in today to talk about how to navigate a layoff, should you be affected?

Scott:
Yeah, and we’re lucky to have be able to talk to Tara. She’s an expert in the space and we learned a lot from her today.

Mindy:
And now for our money moment, this is a new segment we’re doing where we share money, tips, tricks and hacks to help you on your financial journey. Do you notice that you overspend at your favorite online shopping stores? Try removing your autopopulated credit card information and manually input it each time. This will allow you to mindfully notice how many times you’re using the site and evaluate if you really want to make that purchase. If you have a money tip that you’d like to share with us, email [email protected]. Before we bring in Tara, let’s take a quick break. And we are back. Tara Pramme has spent over 14 years in HR roles in tech and startup spaces. She’s now moved out on her own with TEP HR Consulting, providing human resources help to startups. She wrote an amazing article about navigating a layoff for svinvestorsclub.com, which is my friend Jordan’s website where STEM professionals talk about investment classes of all types. Tara, welcome to the Bigger Pockets Money podcast.

Tara:
Thank you. Thanks for having me.

Mindy:
So on average 1600 people are getting laid off daily in the tech industry. 91 tech companies have laid off 24,000 employees in 2023 alone. And actually that might even be low, that number was gathered on January 24th. By the time the show comes out, that might have gone up exponentially. This number includes Microsoft’s 10,000 person cut and Google parent’s companies Alphabet’s, 12,000 person layoff announcements this week.

Scott:
And in December, the unemployment rate in the US was 3.5% with 5.7 million people unemployed. And if that sounds high, it’s not, it’s actually not in historical context, unemployment rates can go from much higher at 3%, 4%, 5%, even 6%, and they can obviously skyrocket during recessions. Furthermore, I think that’s bad news for folks that are hoping that the Fed will react by perhaps lowering interest rates to combat these tech layoffs because it’s not impacting the unemployment rate in a historical setting. So with that, Tara, would you mind telling us a little bit about what’s going on in the recent past here and your observation of what’s going on with these layoffs?

Tara:
Yeah, definitely. So as you guys talked about, I’ve spent a little bit of time in the tech space, live in the Bay Area as well, and so seeing it firsthand, lots of friends and people that we know are being impacted as well. I think during COVID, during the shutdown we saw the economy boost in ways that we weren’t really expecting it to and people hired aggressively during that time. And as a result, now we are seeing things slow down and one of the quicker ways to deal with that unfortunately, is for companies to employ the use of layoffs. So we’ve seen quite a few in the last month or so, and I would say in the last 10 days, again, this is January 24th, so who knows what’s going to happen between now and in the next 10 days, but we’ve seen a lot of big tech with Amazon, Google, and Microsoft laying off 10,000, 12,000 people a piece.

Scott:
And you unfortunately have experience in dealing with this over the course of your career, right?

Tara:
I do, yeah. I have worked in some large companies and some smaller ones as well where I have helped with planning layoffs. Yeah.

Scott:
Awesome. Well, not awesome, but it’s great to be able to pick your brain on this of course with this. Who are the people that are at risk during a layoff? What roles are we talking about sales? Are we talking about software engineers in this context? Are we talking about product, are we talking about operations? Who are the first folks that are at risk in a situation like this?

Tara:
It’s a really great question, and I would say it depends. It depends on the company and it depends on their status and what’s happening and also the selection criteria that are chosen. So typically when you’re planning for a layoff, there are a few people who are looking at the bigger picture. They might be from finance, they might be executives, it could be investors or the board who are involved in helping drive some of these decisions, but usually it’s some combination of finance, HR, and executives who are looking at the big picture to decide what’s the number financially that we’re trying to meet, and how do you do that? And I would say most companies generally try to not impact people because it sucks, right? You try and use other levers first, but at the end of the day, Wall Street responds unfortunately pretty favorably to headcount reductions and so it’s one of the levers that you have to look at and consider when you’re looking at overall finances and health of a company.
Oftentimes when you’re ramping up in companies, you hire recruiters and you hire salespeople. And so also when you are unwinding those same companies, those are usually some of the roles that you look at first. If you’re going to be laying people off, do you really need that many recruiters to hire folks? Probably not. I have seen some companies try and pivot those individuals into other roles because there absolutely are transferrable skills, but unfortunately those are some of the easiest roles to look at when you’re first looking at these things. But you try and look at big picture, what are the things that are going away? So is it projects, is it teams, trying to look at big scope and then figuring out from there what does that mean from the organization structure, and then what does that mean from a people perspective too?

Mindy:
That makes a lot of sense. I think if I was working at a company where I was laid off and the recruiters still had jobs, I would have a very different opinion of the company than if the people who were charged with hiring were let go at the same time that I was laid off. What is the first thing a person should do when they experience a layoff?

Tara:
It’s a great question. So hopefully in an ideal world you have a conversation with somebody when you are being impacted, but we all know that that’s not happening in all of these situations right now. So hopefully you have an email at the bare minimum and you get some sort of paperwork from the company. You should read that paperwork super carefully and understand what the company’s offering you. Most companies are going to offer you some form of a separation agreement or severance package and I should caveat this with I’m not a lawyer and the information I’m talking about should not be considered legal advice or financial advice in that matter, but I have read through these documents on more than a single occasion and worked with lawyers and worked with friends who have looked at these things too when they’ve been impacted. So you want to look at those documents really carefully.
You want to see what your last day of work is. You want to see what they’re offering you in terms of any financial compensation, there are all kinds of implications that you have in terms of eligibility to apply for internal jobs, your equity, bonus, 401ks, all of these kinds of things you’ll want to read through and understand what exactly the company’s offering you. But I would say starting at the front, what’s your last day of work? Not always is your notification day, so the same day that you either get the email or the phone call, that’s not always your last day of work. Sometimes the companies will notify you and you’ll be able to work for up to 60 days. There’s a federal law called Warren, which is, I’ll let you Google that and figure out whether it applies to you or not, but there is a federal law which requires companies to notify you with a certain amount of notice depending on how big or what scale the layoff is.
And so it’s super important to know your rights. There are some big companies, and I won’t mention names, but there are some big companies within the last few years who have knowingly chosen to not take Warren into consideration. And so employees have been able to go back and say, hey, company, you messed this up, you owe us money. And so it is important to don’t take all of those things as assumptions when you’re dealing with these things and know what your rights are.

Scott:
If so, for example, not naming any names, but if there was a big company in the news that did a huge layoff unannounced, they would be required to pay a certain amount of severance to those employees so they would not have to give a notice if they decided just to pay that severance to everyone.

Tara:
Yeah. So it depends on what the situation is and the number of people that are being impacted. But yes, you can pay time in lieu of the notification period. So let’s say a big company laid off a large amount of people and they wanted everybody’s last day of work to be the same day that they notified them and they triggered Warren, they could pay that notice as additional time on the severance instead of letting people work that time.

Scott:
How frequently in your experience, are folks being told they’re being laid off and not given any notice and completely shut out of all of their stuff with no time to really react in those situations?

Tara:
That’s a great question. I think it’s a strategy that big tech employees pretty regularly. From the people that I’ve talked to or posts that I’ve seen on LinkedIn, it seems like the general strategy in big tech is notify and same day exit, and sometimes your access is shut off before you’re even notified.

Scott:
So yeah, of course, there’s a whole bunch of reasons why that might be a bad practice from these companies, but how as an employee can I prepare for that? Besides some of the obvious things are don’t have all of your personal stuff on your work computer with that and get locked out, but are there any steps you can take, any checklists that you recommend for folks?

Tara:
I think that with the development of the cloud and storage options, it’s so much easier to keep all of your personal stuff online now than it was even 5, 10 years ago. And so I would say one of the biggest things is making sure that you have access to what you need access to or want access to. Don’t store all of your personal photos in your corporate email accounts or Gmail accounts or whatever it is that your company’s using. Make sure that those are stored on personal devices. I know that when I was 22 and got hired right out of college, I didn’t have a personal laptop, nor did I have the company that I was working for at the time wasn’t really issuing devices because it was 2006, but I didn’t have a separation of personal and work stuff. I was a couple of years after I moved on from Google, I was at a company that had device hardware policies that I wasn’t comfortable with.
Honestly, I didn’t really trust what I was signing. And so read what you’re signing people, and also I think it’s a really healthy boundary to have a separation between your work and your personal life. And so I think so much of what we’ve seen in the last couple of weeks or so is people whose identities have been wrapped up in these big companies and you are more than the identity of this big company. And that starts with separating your personal and your business stuff. So don’t have all of your personal stuff on a work asset, whether that’s a phone or a computer or whatever else they’ve provided you with, have those boundaries.

Mindy:
That’s a really good point because it’s so easy to just do that one personal thing on your computer or download that one document. I mean, I’m very guilty of that. I’ve got a bunch of random personal stuff on my computer right now. I don’t have my own personal computer because I have a work computer and it’s really, really, really big and I don’t need all this storage space but anyway, that’s not about me. You’ve mentioned several times read the documents, read what you’re signing, if I’m presented with a document that they want me to sign and I want to have counsel before signing it, are there any repercussions for me to say, hey, I want to be able to read this.
Because the company has been working on it for a while, they have attorneys that are probably drafting these documents. I would like to have my own protection. I don’t want to sign all my rights away when if I had somebody giving me a little bit more advice, I would be able to make a better choice for me. But it seems like sometimes the company is like, no, I need this signed right now.

Tara:
Yeah, you should never sign a separation agreement or severance package before reading it through completely. So if the company asks you to sign something immediately, I would just simply say, I’m not comfortable. I need time to read this and I’d like to consult my own attorney. And those are all things that are completely within your rights and you should do honestly.

Scott:
Awesome. So I’m reading that, what are some things I should look out for?

Tara:
Yeah, some things that you should look out for, you should look out for what happens to some of those big financial things that are tied up in the company like your 401k, your equity, do you continue vesting during a notice period? Do you not? How long do you have to exercise things? If you have a 401k, do you need to do something with it? Is the company shutting down, and those assets are going into like a holding fund? Do you want to look into all of those things depending on what the circumstances are for the company and you personally? Is the company going to provide references for you? That’s a big one. A lot of times big tech actually a lot of companies that I’ve seen and been exposed to don’t want people providing references, but in some instances, and especially during layoffs, they may make an exception to that rule.
And so know what the company stance on providing references and if you can potentially negotiate that in there or if you need to get a verification of employment, how do you access that? Let’s say you’re purchasing a house or a car or something and you need a verification of employment, make sure that you know how to get that. I would say one of the biggest things that’s impacting people just from a livelihood perspective is if you are on a work visa, you should absolutely consult with an immigration attorney and see if it’s in your paperwork that the company’s going to allow you to talk to one that maybe they’re paying for.
I’ve definitely seen some companies offer that as an option, so worth seeing if they will help you with that. But seeing what your options are from a visa transfer per perspective or seeing how long you have to find a new job, some visas, you have a certain window to find and transfer your visa to a new job. Some visas are much harder or impossible to transfer so know what your rights are and know what your options are for all of those things in particular.

Mindy:
Oh, I didn’t even think about the visa thing.

Tara:
Yeah. The visa is honestly, my empathy is tremendous for anybody experiencing a job loss who’s on a visa, it is really rough.

Mindy:
So I have one more thing to interject. I have a friend who is an HR person and she posted on Facebook just a couple of weeks ago she said, “You’ve all seen the tech layoffs, right? Well slide up. I have an ironclad NDA, so I’m sharing a purely hypothetical situation. So there you are part of layoffs that have wiped out more than 15% of your company. You receive a severance agreement that will pay you for a minimum of the next three months and cover your health insurance for five months. Part of the agreement that you signed includes a non-disparagement clause. If you don’t know what this word means, Google it. If you don’t know what any of the words in your documents mean, Google them. There’s someone is hypothetically 20 minutes away from pushing the button to pay out millions of dollars in severance payments when this person gets a message asking if someone signed their agreement, that person checks, and sure enough, they’re about to be paid a five figure severance.”
The other end of the message says, “Hold on. Anyhow, it appears that someone allegedly hypothetically didn’t realize that they couldn’t quite talk too much about their former employer in a super public way without having a material breach of their agreement. I mean, talk all you want with your friends and have two margaritas about it because the situation sucks, but there goes your lovely payment that someone was less than 20 minutes away from pushing to your account and you’re still out of a job.”

Scott:
The irony in Googling non-disparagement in the context of this conversation.

Mindy:
Hey, I did not say this was a Google. I specifically did not name this company that this hypothetical, purely hypothetical situation, I also didn’t name names about this person, but oh my goodness, that makes me feel sad. I reached out to my friend, she feels bad about this, but you signed a document that said you would not talk smack about your company and then here you are publicly talking smack about your company. It stinks how they handled this situation for this person who is now still out of a job and their severance, but also this person should have looked at what they were signing and there’s no good way to have a layoff, but there’s a much better way to have a layoff, and that’s with your severance as opposed to without your severance.

Tara:
Absolutely.

Scott:
What do you think about severance and non-disparagement Tara?

Tara:
It’s a great question. Again, I am not an attorney, but most of the companies that I have seen the severance paperwork for, it’s a decently standard clause in the paperwork. And so I think all three of us have said this at least a handful of times now, know what you’re signing, know what is included in that paperwork. I’ve even seen clauses and paperwork that says you can never be rehired by that company or that parent company again. And so if this is a company that you’d want to consider going back to you need to read every single line of that paperwork and see if there’s something like a no rehire clause included in there.

Scott:
And companies do not have to give severance, right? There are some rules that govern this, but in many cases they don’t have to, or in many cases they’re giving much more than is legally required, right? And so Bigger Pockets has not had to do a large layoff in its history, but we have given severance and when you’re providing someone with severance, it’s because things did not go well for some reason. And you’re paying to some extent to have an amicable parting or as amicable as it can be.

Tara:
Absolutely. And so because of that, there are absolutely certain situations where there are clauses included where you wouldn’t want to hire somebody back and so as part of the terms of getting them to sign some paperwork, you’re going to include that in there. Is that the right thing to do? Not necessarily. But is it still left in some paperwork that I’ve seen in the last five to 10 years? Yep, it is.

Mindy:
So what do you do after your last day? You’ve gone, you’ve been laid off, you’ve signed your documents that you have read thoroughly and completely understand all the clauses inside of them, you have worked your last day, what happens next?

Tara:
It’s a great question. So there’s a couple of things that we haven’t really talked about from a mental health and psychological safety perspective, which I think are worth interjecting here, which is layoffs suck. And if you are on the receiving end of a layoff, some people are, maybe they hated their job or they were planning on leaving anyway, and it hasn’t really impacted them too heavily, but there are absolutely situations where this was your livelihood or this was your identity. And so it’s really important to check in with yourself and know if you need help, if you need mental health resources, if you need a friend to talk to, it’s really important to, yes, there’s so many important logistical things, but it’s also really important to check in with yourself and make sure that you’re doing okay and if you need help getting access to that.
And I will say that many companies do offer mental health or employee resource benefits. And so as you’re looking through all of your documents and your benefits options, if you need to talk to somebody making sure that you reach out and say either I need help or looking to see if there’s a phone number you can call or somebody that you can access. So I do want to interject that because I think it’s so easy, especially in the tech space, you are generally surrounded by a lot of people who are goal oriented and super high achieving individuals. And I think a lot of times we as a group of people who like to do things aggressively and get things done can take really big hits emotionally when your identity and all of these things are wrapped up into a job. And so it’s important to check in and make sure that you’re doing okay before you start going through all of these other logistics.
There’s certain things that you want to address in a timely fashion, and we’ll talk about those in a second, but some of these things can take time too. You don’t have to rush to LinkedIn and post that you were laid off. You get to choose how you want to share your story. It’s your story. One of the things that I am really glad seems to have gone away recently is those published lists of people who were impacted. I think it was a big thing that people were doing five years ago. They would publish a list of people because they were trying to help them or they thought they were trying to help them find a new job. Now, those have been reshaped a bit, so people can opt into those lists if they want, but people should get to choose how to tell their own story, which goes back into the mental health and the caring for yourself too.
It’s your story, it’s your identity. You should be able to tell it in a way that you want. Nobody should have to tell this story for you, nor should you feel pressured to put it out on social media. So sorry, that was my one interjection about wellbeing and all that jazz. So from a logistics standpoint and next steps, you want to know what your rights are from an unemployment perspective, healthcare, those are probably some of the bigger things that you want to know quickly either before or immediately after your last day of work. So heaven forbid you’re one of these individuals that was given no notice. One of the first things that I would do is I would look up my state unemployment benefits. So I’m in California, I would go to the EDDs website and see what information I needed to gather to be able to start filing for and receiving unemployment.
So it depends on what state you’re in, but that would be step one for me. Step two would be looking at your health coverage. So if you’re signing a severance agreement, seeing what the company’s offering you in terms of healthcare benefits, if you’re not signing an agreement, seeing how long your health coverage extends through or if you weren’t offered one, seeing when your coverage runs out, I think one of the bigger misconceptions is that you have to sign up for COBRA, which is not necessarily true. COBRA can be really expensive depending on the COBRA plan.

Scott:
What is COBRA?

Tara:
Oh, COBRA, great question, COBRA is your continuation of benefits coverage that if you were covered on a company healthcare plan, it’s what the company needs to offer you in terms of your continuation of benefits coverage. So you should be eligible for COBRA if you were enrolled on your company’s health plans, and the company will give you information about how to enroll. Sometimes and I would say oftentimes nowadays actually COBRA is not necessarily the cheapest option. And so you have to look at your own personal circumstances and see, depending on what your own circumstances are.
If you have kids that need specialized care and your insurance coverage from your company provided that, it might be harder to find that on other plans. And so you have to look into the details of all of these things. But oftentimes just if you’re healthy, if your plan was super basic, it’s worth it to check some of the different healthcare marketplaces and see what your options are. Oftentimes, I’ve heard from people shopping and around that it’s a lot cheaper to go through in California specifically, we’ve got all the different options in the healthcare marketplace. I’ve heard a lot of people saying that it’s half or a third of the price to enroll through California than to continue on COBRA.

Mindy:
My experience with COBRA is that it’s enormously expensive, but that there are some situations like you’re in month nine of your pregnancy, it’s probably a good idea to continue with the COBRA until the delivery again, you should do some research on this now. You don’t have to sign up for COBRA today. There’s a timeframe that you can sign up and it gets retroactive. Isn’t that correct? 18 months is sticking in my head for some reason, but I know that’s not right.

Tara:
18 months is generally how long, 12 to 18 months, there were some continuations. I’m not totally up to speed on where COBRA coverage lands today in terms of how long companies have to cover you, it’s usually at least 12 months that they need to keep you on cobra. You usually have 30 or 60 days to enroll, and as you mentioned Mindy, it is usually retroactive to your last day of work, so it’s likely a paragraph or two in your paperwork that you’re going to get from the company so definitely take a look. You also should get some official notification about your COBRA coverage and your rights within a couple of weeks of your last day of work too.

Scott:
So what happens if I don’t like something in the paperwork and I decide not to sign? Do I just not get COBRA and not get any severance and it’s as simple as that, or how does that work?

Tara:
If you are not going to sign a severance agreement, I would definitely talk to an attorney. It really depends on what the circumstances are. COBRA is something you should be eligible for as well as unemployment, whether you choose to sign an agreement or not but again, I’m not a lawyer. I can’t advise on specific situations. It would really depend on what the company is, what they’re offering, what’s included in that paperwork. One of the companies that I was at, we had two different roadmaps of what was offered. So if you chose to sign the agreement, it was a really wacky setup, but you got X number of weeks plus some additional if you filed for unemployment in the state, you resided in. If you chose not to sign it, you got like two weeks and that was it and of course, you were given Cobra coverage, but your health plans shut off immediately.
If you did sign it, you were given I think two or three additional months of healthcare coverage that was paid for by the company. So most companies try and make those agreements as attractive as possible. And I would say generally speaking, it’s pretty rare that there’s something super egregious in an agreement, but that doesn’t mean that you shouldn’t ask questions. This is, again, as we’ve all talked about, it’s a legal document that you’re signing and you should know what is in it and what the implications are if you violate it after you’ve signed it.

Mindy:
Are they negotiable? So if the company says, okay, we’re going to give you two months of insurance, you’re like could I have three. Can you ask for things? Can you negotiate or is it like take it or leave it?

Tara:
I would say by and large it’s take it or leave it. There absolutely have been some situations where at the smaller companies that I’ve been exposed to that have been willing to help people out. So especially people who are on visas or have special circumstances, smaller companies are sometimes a little bit more willing to help. And that can look like letting people stay on payroll for a little bit longer instead of paying them severance, they’ll let them stay on payroll so that they have more time to find a job and stay in the country, which is really nice and really generous.
And I would say things like that are the exception. Do I expect that we’ll see big tech doing stuff like that? No, there’s too many people, there’s too many fish to fry. I do not expect that we would see big tech doing things like that, which is another plug I’m sure we’ll navigate to this in a few minutes, but when you’re looking forward, there are some benefits to looking at smaller companies. There’s an element of kindness and not just being a number that I think exists when you look at some smaller companies.

Scott:
Yeah, let’s talk about that. Unfortunately, one of the folks who’ve just gotten laid off, what do I do to start my next job hunt? Do I start at the next day? What are resources that are available to me?

Tara:
Yeah, it’s a great question. So I would say one of the best things that I’ve seen come out of the layoffs in the last couple of weeks is the rallying of current and former employees to help people. And you generally see that at a lot of places, but in particular, I’ve personally been super impressed when I open LinkedIn and see all of the different people trying to help each other out. So there are often employee alumni networks that you can join and you can see who’s got jobs available. I’m going to plug the one that referred me here, which is Silicon Valley Investors Club. There are job posting boards that the investors club posts. So seeing what your interests are, seeing what companies offer in terms of alumni networks and start doing some searching and seeing what options are available.
I did see a post from a former Google executive who is at a startup, and she’s been there for a number of years, and she posted something to the effect of, hey, we had the opportunity to hire aggressively over the last few years, and we chose not to because we felt like it was the responsible thing to do. And now we’re a series A or series B company, and we still have plenty of healthy funding, which means we’ve got job openings. And so, hey, come check us out and we’d be happy to have you. And so I would say taking the opportunity to look around, maybe looking at some opportunities that you otherwise would not have considered previously, and seeing what else is out there.
There’s some really exciting things out there. And as we talked about earlier, there are a lot of people who have been impacted by layoffs, but one of the things that’s interesting to me is that there’s actually not as many people filing for unemployment, which means from my perspective, that there are jobs out there. And so it’s taking that moment, seeing what you want to do and starting to look maybe in some different places from where you traditionally would’ve looked at. So you absolutely can search on LinkedIn, but I think it’s time to get creative and see what else is out there too.

Scott:
Yeah, I’m not an expert in this space. But given what you just said that folks are getting laid off and unemployment’s not really rising, it seems like there’s a huge demand for technology skillsets, the type of skillsets that are being impacted by these recent layoffs. Do you think that there’s a major impact that’s going to happen here, or do you think that wages are going to stay essentially the same for that group or maybe just come down a few percentage points or what are you seeing for these folks? Are they really just having an easy time getting another job? Maybe slightly lower base salary.

Tara:
So I’ve been in big tech and I’ve worked at smaller companies too, and I would say base salaries are decently consistent. Of course, we know that big tech pays the most from a total comp perspective, but base salaries are competitive these days. So you generally can go to a startup and get a decently competitive base salary. The perks and the equity and the bonus options might look a little bit different or they may not be there yet but the opportunities and the long-term potential, in my opinion, and of course I’m biased because I took the big tech to small frys path myself, but I think the opportunities far exceed the money at the end of the day. So yes, you might take a total comp hit because quite frankly, nobody can pay equity like some of these big tech companies can. There’s just not evaluation there yet. But if you’re willing to take some risks and you’re willing to do some different things, I think the long-term value gain is immense.

Mindy:
Are there any warning signs our listeners should look out for prior to a layoff?

Tara:
So I think one of the things that is most comical to me is that when people are planning a layoff, they think they do such a great job of keeping it under wraps, which almost never is the case. People almost always know when a layoff’s coming, and I’m sure I will have some HR peers who will hate me for this, but there’s websites out there too who confidentially post when they think that layoffs are coming. So there’s the blind, there’s layoffs.fyi, I’m sure there’s others that I don’t know about. I think there’s the layoff.com which lists all of these. So when I’ve been in HR and working on layoffs, I’ve absolutely have checked some of these websites from time to time to see if news has gotten out or actually, there’s even Reddit too honestly, there’s so much stuff that ends up on Reddit too.
There’s warning signs though. You can see cost cutting measures. Those are kind of the first flags. I’ll tell a funny story about my husband was laid off back in the 2008 bust and he was like, the first thing that I started seeing, the warning sign was people scavenging and HR and facilities people taking stuff out of the supply cabinets. So when I had to go beg for a pen or a pencil or eraser, that’s when I knew that that things were getting fishy. That doesn’t happen as much anymore, I don’t think, but you will start seeing, they’ll put pauses on hiring, finance will get a lot more critical about approving expenditures, there’s a few red flags that you see, and then you just start seeing people meeting with some sort of urgency and planning and secrecy and all that kind of jazz.
So I would say generally speaking, people kind of have an idea of when these things start to come down the pike. I have some friends still at some of these big tech companies and I heard rumblings of these things happening are coming back in November. So I would say it’s people shouldn’t have been surprised that some of these big companies were going to do this in the past few weeks, but you never think it’s going to happen to you I think also.

Mindy:
I think that’s really important to note. You never think it’s going to happen to you. And if you work at a company right now, you should have your resume ready to go. If you haven’t updated your resume in the last month, now is a really, really awesome time to make sure that you have everything up to date so that you can calmly update your resume instead of frantically updating it while you are trying to find a new job along with 10,000 of your friends or as it happens, 200,000 of your peers.

Tara:
Yeah. I actually love that point, Mindy, and I think it brings about another really great thing to think about, which is if you’re happy in your job, there’s no better time to update your resume than right now because you have access to your internal systems, you have access to your past performance reviews, which is likely where you’ve done a lot of really deep thinking about all of those awesome things that you’ve accomplished in the last 12 months. And those are the things that you really want to be highlighting on your resume and so if you are listening to this and you’re out of company and you haven’t been laid off, take 30 minutes and go see what those things are that you put on your performance reviews that highlighted all of the awesome contributions that you’ve had and update your resume.

Mindy:
And an updated resume when you’re in a happy mindset is going to read a lot differently than an updated resume when you’re so angry at your past company. I did so many things for them and they just laid me off like that attitude is going to seep into your resume. And I mean, I’m sure you’ve read resumes where you’re like, no, not even going to call you. I don’t care how qualified you are, you are an angry soul. It’s hard, it’s heartbreaking, it’s soul crushing to get fired, but you need to look out for yourself. So right now, if you haven’t updated your resume in 2023, hop to it.

Tara:
Yeah. Which is also part two I think of the conversation we had about the non-disparagement stuff too. If your first MO is to go blast your company on LinkedIn, guess what? Your future company that’s looking you up to see what you’re about is going to see that too. So super important to know what you’re posting and think about it twice before going on that angry rant or doing whatever you think you want to do. Pause, maybe call a friend, call a therapist, and have that angry rant with them instead of on social media where it’ll live forever.

Mindy:
Absolutely. That is fantastic advice, Tara.

Scott:
Yeah, because your future employer will look at your social media part of the background. Just like if you are a landlord, you’ll look at your tenant and if they say they have no pets and their Facebook profile picture is them holding their pit bull, that tells you something, right? And so just be smart about this stuff.

Tara:
Absolutely. Be smart and I think one of the other things too is assuming positive intent. There are companies, don’t get me wrong, that really royally messed things up with all of this stuff, but there are also plenty of people who are probably still at that company who want to help you and who will do anything that they possibly can to help you. And so I think it’s a Fred Rogers quote, which is the look for the helpers. I think that’s probably one of the biggest things that you can do for yourself right now from a moving forward perspective is looking for the helpers. I’ve seen so many acts of kindness and offering help out on different avenues and mostly LinkedIn and some forms of social media take people up on their offerings. I’ve personally offered to help review resumes.
I’m happy to help do that. I haven’t gotten anybody who’s reached out yet, and maybe they’re not ready to, but I’m happy to help review resumes. I’m happy to do some interview coaching and prep, so reach out to people who have offered things and take people up on those things, people are willing to help.

Mindy:
Absolutely. Tara, thank you so much for your time today. This was super helpful and super timely, unfortunately. But I hope that people who are listening can take your words to heart and take this as the advice that they need, the impetus they need to get their resume in order just in case. And I hope that nobody listening is impacted by this at all. Tara, where can people find more about you?

Tara:
It’s a great question. As a typical HR person, I generally keep a low profile, but you can find me. I occasionally write guest posts on Silicone Valley Investors Club. You can find me on LinkedIn or tara.pramme, P-R-A-M-M-E, @gmail.com if you’re looking for HR help, I’m happy to help.

Mindy:
Awesome. Tara, thank you again, and we will talk to you soon.

Tara:
All right, thank you.

Mindy:
All right, Scott. That was Tara Pramme, and that was interesting and informing. I can’t say that was awesome because unfortunately, if you are being affected by a layoff, that is going to suck. But that was a very interesting and informing episode, and I learned a lot about how to navigate a layoff, and I hope that people listening are able to better navigate their own experience should they be affected by a layoff, and I hope they’re not, but can’t control the world.

Scott:
One of the things we didn’t talk about is the why and how, from layoff perspective, how layoff folks are and so that was something we talked about with Tara following the recording. And the why can vary across a bunch of different reasons. The company’s in trouble, right? Shareholders are putting pressure on profit margin, over hiring and when times appear to be really rosy and then having to unwind that at a later time, and as a CEO, that’s my worst nightmare, is making decisions today that would’ve required me to make those kinds of layoff decisions tomorrow. And there’s a whole bunch of different reasons, but I believe it’s my duty as a CEO to attempt to the extent possible to prevent that from ever happening and to be very conservative with that. Much better to be conservative and avoid that situation than to find yourself in it.
So who knows what the future brings, but I hope never to have to deal with that as a CEO. And we talked about if it does have to happen, how does one go about making those decisions? It’s not necessarily, oh, just all the low performers, we’re going to move on from there. There’s lawyers involved. Some companies will use as many as four or five sets of attorneys to review the documents over and over and over again and the decisions they’re making, and who’s going to be part of the layoff in order to discuss that, right? Yeah. And one of the things Tara mentioned is there’s going to be attempts to make it black and white to avoid potential legal risk in any form whatsoever. And that could mean things like if you’re not in our headquarters every day, if you’re a remote employee, that’s going to put you up the list.
If you’re clearly not and have been communicated with not meeting performance standards, that’s going to put you up the list. So there’s all these different types of things to think about and understand there. And I think that it was really interesting that we left the episode with Tara and her saying, folks tend to know a layoffs coming, but they never think it’s going to be them.

Mindy:
Yes. And I went through a layoff myself a hundred years ago, and it was really difficult. I felt horrible about myself, I felt very angry with the company, and looking back, of course, I could see the writing on the wall now, but at the time it was like, why me, why me, it was probably deserved let’s just say that. But you move on and you follow the steps that your HR department is sharing with you. You apply for unemployment, you read through the documentation. How many times did we say that during this episode, Scott, read the documentation that they give you to sign. Read it before you sign it. Make sure you understand it. Ask a bunch of questions. Consult with an attorney. Make sure you understand what you are signing, including that non-disparagement agreement, which is most likely going to be in your document.
Make sure you understand fully what you’re being offered and what you have to do in order to get that package and then make finding a new job your job. I took the weekend off. I’ve got laid off on a Friday. I took the whole weekend off for a pity party. Monday I was in the unemployment office when it opened. I applied for my benefits, and then I spent the whole rest of the day with the Sunday newspaper because it was a hundred years ago, the Sunday newspaper, looking for my next job. I applied to everything that sounded even remotely interesting to me and my resume at the time was not up to snuff. If your resume hasn’t been updated in the last month, you need to update it. Get a resume writer if you need to. If you’re not amazing at writing your resume yourself, get a resume writer to help you out. It could be the difference between a really awesome job and not even getting called in for an interview.

Scott:
And we can probably close out with the concept of this is one of the reasons why we’re pursuing financial independence is to have insulation from this risk, right? It is very risky to have all of your eggs in one basket, which is the basket of a career. And all of my wealth is in my future earnings potential that’s a tough position, right? Spend less than you earn, invest, buy real estate, buy stocks, buy whatever it is that you think is going to give you a portfolio capable of sustaining financial independence and rapidly work towards that work optional. Along the way, even before you’re financially independent, you’re going to have a lot more flexibility because your runway is going to extend, the amount of time you could survive without a paycheck it’s going to extend from a month to three months, to six months, to five years to 10 years, to 25 years, and then ultimately forever, which is the ultimate goal. But you’re naturally building insulation against this risk if you’re listening to BP Money and working towards financial independence.

Mindy:
Yes, it’s called F U money that JL Collins coined that phrase, F U money. That means forget you money.

Scott:
That’s right. Forget you.

Mindy:
Forget you. I don’t need you. I have my own money. Forget you. That’s what it is.

Scott:
It’s about, power. Right? And my opinion, you should never live your life in a way that exceeds that power to one company, right? You should take that back for yourself and the way you do that is by achieving financial independence.

Mindy:
Absolutely. All right, Scott, should we get out of here?

Scott:
Let’s do it.

Mindy:
That wraps up this episode of The Bigger Pockets Money podcast. He is Scott Trench, and I am Mindy Jensen saying swish swish cuttlefish.

Scott:
If you enjoyed today’s episode, please give us a five-star review on Spotify or Apple. And if you’re looking for even more money content, feel free to visit our YouTube channel at youtube.com/biggerpocketsmoney.

Mindy:
Bigger Pockets Money was created by Mindy Jensen and Scott Trench, produced by Caitlin Bennett, editing by Exodus Media, Copywriting by Nate Weintraub. Lastly, a big thank you to the Bigger Pockets team for making this show possible.