What to Do Right After Being Laid Off and the Order to Do It In

U.S. employers announced 1.2 million layoffs in 2025, an increase of 58% from the previous year and the highest amount since 2020, according to outplacement services firm Challenger, Gray and Christmas. If you are one of them, the right order follows the deadlines in federal law and official pages, not your resume. Hold the severance agreement and read it on your own time. Check whether your employer owed you advance notice. File your unemployment claim in the first week. Choose health coverage in that same week, before its windows close. Only then decide what to do with retirement money and start the search. Most steps below come with the deadline printed in the federal rule or official page behind them. For Metaintro readers, the goal is to reach the job search with your money, coverage and rights intact.

What Should You Do on Day One, Before Signing Anything?

Day one is for collecting facts in writing. Ask for your last day, your final pay date, the date your health coverage ends and the name of the person who handles benefits questions. If those answers come in a conversation, send a short email afterward that repeats them, so you have a dated record.

Save what belongs to you, such as your own performance reviews, your list of accomplishments and the personal contact details of colleagues who want to stay in touch. Leave company files and confidential material where they are. Then write a plain note of the layoff meeting while it is fresh, with the date, who was there and what was offered.

The most important day-one rule is about the severance agreement. The moment you are handed an agreement, check whether your employer gave you a deadline for accepting or declining it, a step on the U.S. Equal Employment Opportunity Commission checklist for workers offered severance. If you are being rushed, ask for more time and put your request in writing. A rushed decision is a red flag, because an employer who is fair will understand that you cannot review or make decisions about an important document on a moment's notice.

Your day-one list, in order:

• Confirm your last day, final pay date and benefits end date by email.
• Take the severance agreement home unsigned and note its deadline.
• Save your own reviews, work record and contacts, and nothing confidential.
• Write a dated note of the layoff meeting.
• Tell one trusted person, so the next decisions are not made alone.

How Long Do You Have to Review a Severance Agreement?

Treat the agreement as the contract it is. Severance is often offered in exchange for a waiver of claims connected with the employment relationship, including discrimination claims. Senior executives commonly negotiate severance terms when they are first hired, while other employees are typically offered severance agreements and asked to sign a waiver at the time of termination.

If you are 40 or older, federal age discrimination law sets firm review periods. A waiver of age claims must give you at least 21 days to consider the offer, and that period runs from the date of the employer's final offer. If material changes are made to that final offer, the 21-day period starts over.

If you are 40 or older and are laid off along with at least one other person in a reduction in force at the same time, the rules widen. The employer must give you and the others written notice of the layoff and at least 45 days to consider the waiver before signing it. In that case the employer must also tell you in writing which decisional unit it chose from, meaning the class, unit or group of employees it picked from, along with the eligibility factors and time limits for the program, and disclose the job titles and ages of the people in that group who were and were not selected.

Signing is not the last step either. A waiver must give you seven days to revoke your signature, and that revocation period cannot be changed or waived by either party for any reason. The Older Workers Benefit Protection Act lists seven factors that must be satisfied for a waiver of age claims to count as knowing and voluntary. Besides the review and revocation periods above, the waiver must be written in a manner that can be clearly understood, must name the Age Discrimination in Employment Act, must advise you in writing to consult an attorney before accepting, must not include rights and claims that may arise after the date you sign, and must be supported by consideration in addition to what you are already entitled to.

If the package is large or the language is hard to follow, an hour with an employment attorney before you sign is a fair use of the review time. To see how one real package was structured, read about what Oracle's severance plan paid in the last round, keeping in mind that yours will differ.

Did Your Employer Owe You Advance Notice Under the WARN Act?

Some layoffs come with a legal warning period, and knowing whether yours did helps you judge the dates in your paperwork. Under the federal Worker Adjustment and Retraining Notification Act, an employer may not order a plant closing or mass layoff until the end of a 60-day period after it serves written notice to the affected employees or their representative, to the state's rapid response unit and to the chief elected official of the local government.

The law does not cover every employer. It applies to a business that employs 100 or more employees, excluding part-time employees, or 100 or more employees who together work at least 4,000 hours a week, not counting overtime. A plant closing under the same definitions section is a permanent or temporary shutdown of a single site, or of one or more facilities or operating units within a single site, that causes an employment loss for 50 or more employees, not counting part-time employees, during any 30-day period. A mass layoff is a cut at one site, in any 30-day period, that hits at least 33 percent of the employees and at least 50 employees, or at least 500 employees, again not counting part-time employees. Smaller cuts at one site within any 90-day period are added together when in the aggregate they exceed those minimums, unless the employer shows they were the result of separate and distinct actions and causes and not an attempt to evade the law.

There are exceptions. The notice period can be shortened when a closing or layoff is caused by business circumstances that were not reasonably foreseeable, and no notice is required when it is due to a natural disaster. The notice period can also be shortened for the shutdown of a single site if the employer was actively seeking capital or business that would have let it avoid or postpone the shutdown and reasonably and in good faith believed that giving notice would have kept it from getting that capital or business. An employer relying on an exception must still give as much notice as is practicable, with a brief statement of why the period was cut.

What this means in practice is simple. If your employer is large, your site lost many jobs at once and you got no written notice, write that down in your day-one note. It is a question to raise with an employment attorney, and it costs nothing to keep the record.

Why Should You File for Unemployment Early?

Unemployment is the first money you can line up, and it is run by your state. There is no federal unemployment program, and each state manages its own unemployment insurance program and pays benefits. The program pays money if you lose your job through no fault of your own.

File where you worked. In most cases you should file in the state where you worked instead of in the state where you live, and if you worked remotely or outside your home state, your home state's unemployment office can help you file in a different state. To qualify, many states require that you earned at least a certain amount within the last 12-24 months, worked consistently over that span and look for a new job.

Do not wait for the severance question to be settled before you file. Let the state decide whether you qualify rather than ruling yourself out. If you are hesitating, the reasons covered in why so many laid-off workers skip filing for unemployment are worth a few minutes. And if your state has rebuilt its system, a look at how Kansas rebuilt unemployment filing with AI shows what a newer claim process can feel like.

Watch for fraud while you file. Scammers file unemployment claims using other people's names and personal information, so use only your state's official site and keep your claim confirmation.

How Does the COBRA Clock Run in Your First Two Months?

COBRA lets you keep your old group health plan for a limited time, and its deadlines run in a set sequence. COBRA does not apply to a group health plan for a calendar year if all employers maintaining it normally employed fewer than 20 employees on a typical business day during the preceding calendar year.

First, the notices. Your employer must notify the plan administrator of your job loss within 30 days of the date of the qualifying event, or a longer period set in the plan's terms for a multiemployer plan. The administrator then has 14 days from being notified to tell you about your rights, again with a longer period allowed by the terms of a multiemployer plan. Watch the mail and email in those weeks, because the notice date can decide when your own window ends.

Next, your decision. The election period must be of at least 60 days' duration, and it ends no earlier than 60 days after the later of the date your coverage ended or the date of the notice. You do not have to pay at once, either. The plan may not require any premium before the day which is 45 days after your initial election.

Then, the length of coverage. After a termination or reduced hours, COBRA coverage must be offered until the date 18 months after the date of the qualifying event, with longer periods in some special cases. The same section lists earlier end dates too, including the date coverage stops because a premium was not paid within 30 days after the date due or within such longer period as applies under the plan. Expect to carry the full cost. With COBRA you pay 100% of the premiums, including the portion your employer used to cover, plus a small administrative fee.

When Is a Marketplace Plan the Better First-Week Choice?

COBRA is not your only option, and you do not have to enroll in COBRA. Compare its cost with plans on the HealthCare.gov Marketplace before you decide, because Marketplace plans may cost less than COBRA, especially if you qualify for savings based on your income.

The Marketplace has its own window. You can enroll in a Marketplace plan within 60 days of losing your job-based coverage. You may also qualify for a special enrollment period if you expect to lose coverage in the next 60 days, so you can start shopping before your last day. Savings and eligibility are based on your household size and estimated income for the year you need coverage, not your employment status.

Two rules make the order matter here. If you do not send acceptable documents about losing coverage, you will not qualify for a special enrollment period, so keep the letter or notice that shows your coverage end date. Outside Open Enrollment, you can switch from COBRA to a Marketplace plan if your COBRA coverage is running out, if you have to pay the full cost of COBRA because your former employer stops contributing or you lose a government subsidy, or if it is still within 60 days of when you lost your job-based coverage. If you choose to end COBRA coverage early, you will have to wait until next Open Enrollment to get Marketplace coverage, unless you experience another life event, like getting married, a new baby or dependent, moving or losing health coverage.

You can compare the cost of COBRA with plans available through the Marketplace before deciding on health insurance, according to HealthCare.gov's COBRA guide for unemployed people.

Open Enrollment runs November 1 to January 15 each year. If you are eligible for Medicaid or the Children's Health Insurance Program, you can enroll in those programs any time and coverage can start immediately. If you have prescriptions or appointments coming up, book or refill them before your old coverage ends where you can.

What Deadline Applies to Your Retirement Money?

Leave retirement savings where they are until you have a plan, because a payout made to you starts a clock. If a distribution from a retirement plan or IRA is paid directly to you, you have 60 days from the date you receive it to roll it over into another IRA or retirement plan. Small balances follow their own rule once you no longer work for the employer that maintains the plan. If your account is between $1,000 and $5,000, the plan administrator may deposit the money into an IRA in your name if you do not elect to receive the money or roll it over. If it is $1,000 or less, the administrator may pay it to you, less, in most cases, 20% income tax withholding, without your consent, and you can still roll it over within 60 days.

A check made out to you also costs more than it looks. A retirement plan distribution paid to you is subject to mandatory withholding of 20%, even if you plan to roll it over later, so you would need other cash to roll over the full amount. Money you do not roll over is taxable, other than qualified Roth distributions and any amounts already taxed, and you may also face the 10% additional tax on early distributions unless an exception applies.

The cleaner route is a direct rollover. You can ask your plan administrator to pay the money directly to another retirement plan or an IRA, and withholding does not apply to that kind of transfer. Contact the administrator for instructions before you sign any distribution form.

How Do You Stretch Your Cash While Benefits Start?

Build a bare-bones budget in the first week. List rent or mortgage, utilities, insurance, minimum debt payments and groceries, then divide your cash on hand by that monthly total. The result is your runway, and it decides how selective your search can be. Call lenders and your landlord before you miss a payment and ask what hardship options they offer.

Food help is there if you need it. The Supplemental Nutrition Assistance Program can help you pay for food if you have a low income, and to qualify you must meet your state's requirements, including income limits and the money you have in the bank. You apply through your state or local SNAP office, possibly online, in person, by mail or by fax, and you may need an interview before approval. Approved benefits are added to an Electronic Benefits Transfer card each month.

Plan for tax on unemployment benefits, too. You generally must include in income all unemployment compensation you receive, and you can choose to have federal income tax withheld using Form W-4V, Voluntary Withholding Request. If you do not have tax withheld, you may be required to make quarterly estimated tax payments.

How Common Are Layoffs, and Does AI Change Your Plan?

You are not alone in this, and the causes vary. On Challenger's count, technology firms ranked second only to the federal government among industries, with 154,445 planned layoffs in 2025. Challenger tracks public announcements and estimated that about 55,000 cuts in 2025 were tied directly to AI adoption, and it attributed 21,490 planned layoffs in April 2026 to artificial intelligence and automation efforts.

There is no solid measure for AI-driven layoffs, and some cuts are clearly tied to automation, while others appear driven by a desire to free up cash for AI investments, in reporting from the Society for Human Resource Management. For you, the cause matters less than the timing. The steps and deadlines above are the same whatever the reason your role was cut.

SHRM's January 2026 forecast expected a slow market rather than a collapsing one. Justin Ladner, senior labor economist at SHRM, said health care has stood out with an intense amount of demand, while other parts of the labor market have clearly cooled off, especially entry-level roles in white collar occupational groups.

It is not expected to be a booming labor market, nor is it expected to be a crashing labor market, Justin Ladner, senior labor economist at SHRM, said, according to the SHRM 2026 labor market forecast.

How Should You Explain the Layoff and Restart the Search?

Once the paperwork, claim and coverage are handled, prepare one short, true answer and use it everywhere. Say what happened, what you did well and what you want next, with no apology and no blame. If your layoff was part of a larger cut, say so plainly, because it keeps the answer short.

Give the search a schedule. Block hours for applications, separate time for conversations with people who work where you want to work, and keep a simple log of each role, contact and next step. That log also helps if your state asks you to report your work search. Reach out early to former managers who can speak to your work, and remind them of the projects you shared when you ask for a reference.

If the layoff has you questioning your field, you are in good company. The stories of how laid-off tech workers are reinventing their careers offer ideas that apply well beyond tech. A stopgap job is a sound bridge if your runway is short, and it is easier to search from income than from worry.

What This Means for Laid-Off Workers, and What Should You Do First?

The order is not a matter of taste. It follows which deadlines you can lose for good. A signed severance agreement gives you a cash payment or benefits in exchange for signing away your right to bring certain legal claims against your employer, and for workers 40 or older waiving age claims the review and revocation periods are set by federal law, so the agreement comes first and stays unsigned until you have read it. Unemployment comes next because each state manages its own unemployment insurance program and pays benefits. Health coverage comes in that same week because the COBRA and Marketplace windows set out above are short.

Retirement money and the job search come last on purpose. Both reward patience, and a payout made to you can cost tax you never needed to pay. The aim is not to apply fastest. It is to protect your pay, coverage and rights first, then search from a stable base.

Lacey Kaelani, Metaintro's CEO, puts it this way: A layoff hands you a stack of deadlines before it hands you a job search. Clear the deadlines first, and you go into every interview with fewer worries and a clearer head.

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People Also Asked

Q: Are workers 40 or older entitled to more severance pay?

A: No. Packages are often structured differently for different employees depending on position and tenure, but an employer is not required to give you a greater amount than it gives a person under 40 solely because you are protected by the Age Discrimination in Employment Act. For workers 40 or older waiving age claims, the waiver must meet federal requirements, including at least 21 days to consider the offer and seven days to revoke a signature.

Q: How much can COBRA cost?

A: Under the federal COBRA statute, the premium the plan charges shall not exceed 102 percent of the applicable premium for the period, and you can choose to pay it in monthly installments. If your coverage is extended for a disability, the cap rises to 150 percent for any month after the 18th month. The same section of the statute also bars a plan from conditioning COBRA coverage on evidence of insurability.

Q: What tax form will I get for unemployment benefits?

A: You should receive a Form 1099-G showing the amount of unemployment compensation paid to you in Box 1, and any federal income tax withheld in Box 4.

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