The year 2023 will be remembered for huge layoffs in tech and non-tech firms in India. The latest company to lay off employees is Third Wave Coffee, a coffee and food brand which has investment from Zerodha’s co-founder Nikhil Kamath. According to reports, 120 employees have been laid off from various teams including tech, finance, marketing, etc. Even though, economically, the year has not been as volatile but that has not stopped firms from taking drastic measures to streamline or ‘restructure’ their human resource and tighten their finances. In 2023, tech companies have laid off 226,000 employees so far. According to media reports, this marks a 40 per cent increase in layoffs from 2022 when the services of over 200,000 employees were terminated. Apart from the mental troubles, the terminated employees face big financial stress as uncertainty looms over the prospect of getting a new job or a new source of steady income. One needs to stay calm and assess his/her financial situation as it stands on the day.
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You need to act proactively and follow these steps to manage your finances while you search for a new job or business venture:
Assess your current financial situation: This is the first step. Check every detail of your finances as they stand. Calculate and assess how long it can support you without a job. This depends on your savings, liabilities like debt, EMIs or policy premiums and investment plans. Make a budget as per a tentative timeline.
Reduce expenses: As your monthly cash flow is set to take a hit due to lay off, you need to immediately arrest expenses which are not vital. Cut surplus spending. Assess whether you need to continue certain subscriptions or memberships. Do not spend money on unnecessary shopping. Stretch your money as much as you can. Save more and spend less. That does not mean you stop necessary things, evaluate as per your custom needs.
Make monthly budget: Prepare your monthly budget in advance and stick to it. Set aside an amount for necessary spending like monthly bills, food, cooking gas, EMIs and premiums. If you have a limited budget, it will help you prioritize what needs to be prioritized. Do not forget to set some money aside for your travel expenses as you go for networking and prospective job interviews. While making a budget, follow the 50/30/20 rule allocating half of your budget to necessities, 30 per cent for wants (travel for interview) and 20 per cent for saving or repayment of debt.
Do not stop insurance policies: Try your best to continue with your life and health insurance policies. Do not default on them. Make them part of your monthly budget plan and stay invested.
Check govt plans and schemes: India has not been big on unemployment support and there is rather limited support from the government in case you lose your job. Most of the schemes cater to rural youth or individuals in the category of below the poverty line. But in case you are planning to start your new venture or dive into the start up seen, you can check the ‘startupindia.gov.in’ website to check the scheme that suits your needs.
Continue working in some capacity: Freelance or take project-based work which lasts for a couple of week or months. This will provide you with an additional financial cushion to ride the financial tide you are in. Do not let go of short-term work opportunities while you search for your next break.
Most importantly, stay calm and take care of your mental and physical well-being. Read and watch things that make you happy and stay away from negative thoughts or people. Remember, falling sick will only add to your financial burden. Eat healthy and stay focused. Time changes as it always does.
