How Worried Should You Be About a Layoff in 2024?

Despite many warnings of a 2023 recession, last year, the U.S. economy managed to avoid one. And all told, the economy is in pretty good shape right now from a jobs perspective.

The unemployment rate is at 3.7% on a national level, which is consistent with the jobless rate before the pandemic. And historically speaking, 3.7% is a fairly low level -- not one of concern.

Plus, data from outplacement firm Challenger, Gray & Christmas found that U.S. employers announced 34,817 job cuts in December. That might seem like a lot, but it's considerably lower than the 45,510 cuts announced in November. And it was the second-lowest monthly total in 2023 after the 23,697 job cuts announced in July.

Despite that, U.S. workers seem to be worried about job loss in 2024. A recent survey by MyPerfectResume found that 78% of respondents expect the U.S. economy to enter a recession in 2024, and 85% are concerned that their jobs will go away this year.

If you're worried about a 2024 layoff, you're clearly not alone. And it's hard to say how concerned you should be.

While the economy may be in good shape, that doesn't mean your employer is in good shape. And some companies may opt to lower their headcount this year to conserve costs and allocate more resources to other initiatives, even if they're not necessarily doing poorly.

That's why it's a good idea to be prepared for a layoff at any time. Here's how.

1. Make sure you're set with emergency savings

The loss of your job could upend your personal finances in a big way. Even if you're entitled to unemployment benefits, those generally will not come close to replacing your paycheck in full.

To ensure you can pay your bills after losing a job, make an effort to build at least a three-month emergency fund. If you have enough money in your savings account to cover 90 days of essential expenses, that buys you a good number of weeks to dust off your resume, network, and look for a new job before having to resort to charging bills on your credit cards.

2. Boost your skills to make yourself more valuable to your employer

Being great at what you do unfortunately won't guarantee that you'll be spared if layoffs hit your place of work. But you may be less likely to lose your job if you have a lot more knowledge and bring more skills to the table than the majority of your colleagues.

In the coming months, try to learn new skills and add to your resume. That could mean shadowing a more seasoned professional at your office or taking free online courses in your spare time. Even if having additional skills doesn't prevent you from getting laid off if your employer decides to make cuts, it might make it easier for you to find a new job.

3. Put a backup income source in place

The idea of your paycheck disappearing completely can be scary. One way to mitigate that fear is to join the gig economy and take on a side hustle. That second job can be something that's convenient for you. So if your only time to do extra work is over the weekend, signing up to deliver food or drive for a ride-hailing service may be a good bet.

The upside of having a second job is that you'll have additional income to boost your savings. Also, you may have the option to increase your side hustle hours in the event of a layoff. That way, you'd be able to earn more money while looking for a new full-time job.

Getting laid off can be a huge emotional and financial blow. But the more you do to prepare for a layoff, the more peace of mind you might give yourself.