What To Do If Your Company Shuts Down
The Key Is Not To Panic And Plan
Layoffs can be the most difficult phase of one’s professional life. While cost cutting layoffs are one thing, when a company shuts down, it’s a disaster one rarely imagines.
The latest news of Reliance Communications planning to shut its wireless business shows that no corporation, big or small is immune from layoffs.
In such a scenario, the employees at the receiving end, tend to lose all hope to the extent that some go into serious depression. While the adversity of a job loss, especially if it’s of the main bread-winner can be quite challenging, some practical and well-planned measures can help you get back on track.
Post Layoff Measures
- Plan Your Severance Pay: Severance pay is standard when letting employees go in most companies. While some small companies may not have this provision, companies registered in India, in accordance with Labour law and the Industrial Disputes Act are obliged to provide a severance pay to its employees. It may vary from employee to employee but an amount has to be given by the company to the employee.
In the case of government corporations that shutdown, a lump sum settlement is given, which many agree to take on a monthly basis. Whatever may be your case, make sure to use this pay carefully and invest in necessary expenses only, as you may not know for how long you may be without a job.
- Turn to Liquid Assets Barring Gold: It’s easy to get financially fluttered when one suddenly loses their job, especially with the credit commitments in today’s age. In such cases try not selling gold, as most Indians do, but instead turn to other liquid assets like fund investments, recurring deposits or in extreme cases even fixed deposits.
- Don’t Be Desperate: Know your worth when applying for jobs. Think of it as applying for a job as you are presently employed. Its ok to deviate from your core competence and search for a slightly different domain, but do not give in completely.
In terms of salary you will need to match your earlier salary to oblige to your financial commitments, and make sure to put this across when negotiation salary.
- Don’t avoid Payments: If you have debts, be it credit card bills or loan EMIs, don’t go into hiding. Meet your financial institution and request a restructuring to suit your payment ability.
- Get Help: Instead of just knocking on recruiter agencies, try reaching out to friends and acquaintances in the circle. You will be surprised to know that many industries like advertising and entertainment media, still hire most of their talent through references and not job postings.
It’s unfortunate that one has to take drastic steps when they lose their job, but if financial planning is done well in advance, some of these measures can be avoided.
- Invest in both liquid and non-liquid assets: While non-liquid assets tend to give us more returns when investing, it is advisable to invest in some liquid savings as well, to be able to pull them out in times of need.
- Make A Corpus Fund: Treat this as an emergency fund or corpus fund to be used in such situations. Make sure you fill it back once you have your new job, to be able to use it for other emergencies.
- Health Insurance: Make sure to have health insurance policies for yourself and all other family members, so that in case of a medical emergency arising during the period you are out of a job, your medical expenses can be taken care of.
- Do Not Withdraw Your PF: Make sure not to withdraw you PF pre-maturely and keep it for situations like these, when you can withdraw it.