As 'Layoff Anxiety' Rises, Here's How to Safeguard Your Finances

U.S. workers are starting off the year feeling pretty glum about their job security.

Perhaps it’s because waves of layoffs at Meta and across the federal government have been dominating headlines in recent weeks. The release of the second season of the dystopian workplace drama Severance may also be contributing to the fear of getting “disappeared” from work.

Whatever the cause, 1 in 3 Americans report having “layoff anxiety,” according to a recent survey from Clarify Capital, a small-business lending firm. The company surveyed 1,000 U.S. workers in January, and it defines the term as a “fear of losing your job or worry of never finding another.”

The fear of layoffs is especially acute among Gen Z workers, who are generally 18 to 28, as well as remote workers, the survey found. The share of those groups experiencing layoff anxiety jumps to 40% and 47% respectively.

The overall share of workers experiencing layoff anxiety this year marks a slight uptick from 2024, when about 30% reported the same.

If you’re worried about losing your job this year, there are a few steps you can take now to help you prepare.

Make a budget

If you haven’t already, start a budget as soon as you can if you’re worried about layoffs so that you have a clear understanding of the money coming in and going out. That way, if you do get grim news from your employer, you won't be left scrambling to do math while you're potentially negotiating benefits or severance.

It's also the first major step toward creating an emergency fund, which can cushion the financial impact of losing a job. The 50/30/20 budget is one of the most popular strategies, dedicating 50% of your budget toward needs, 30% toward wants and 20% toward savings. The last two categories can be tweaked as needed based on how quickly you need to pad your savings. (Money's budgeting guide can help you get started.)

Get your emergency fund in shape

For most Americans, losing a job means losing their main source of income. That’s why it’s crucial to make sure you build an emergency savings fund while you’re still employed.

Ideally, an emergency fund should be able to support you for at least a three-month period without an income source. Some financial experts recommend saving up to a year’s worth of expenses, but it depends on your circumstances. Some emergency savings is always better than nothing.

According to Clarify Capital's survey, 46% of respondents have less than three months' worth of expenses saved up, with 13% having no emergency savings at all.

Prioritize your debts

Once your emergency savings is in place, you can take a look at your debt. It's never a bad idea to pay down high-interest debt if you can afford to do so without drawing down your emergency savings. Debts such as credit card debt or personal loans, which often have interest rates in the double digits, are high priority and worth chipping away or eliminating while you have a steady source of income.

Large, long-term debts like mortgages or student loans are crucial, too, and you should continue making on-time payments. But if you have wiggle room for making overpayments or bi-monthly payments, you should consider directing them toward the debts with the highest APRs.

As you're prioritizing your debts, it's a great time to get familiar with any financial hardship programs your lenders may offer. Some lenders grant temporary forbearance periods or may be willing to wave fees or other consequences for partial or late payments. Knowing ahead of time can help you focus on the debts that absolutely must be paid versus the ones that have some flexibility.

Update your resume

An up-to-date resume is essential to the job search. Especially if you’ve been with your current company for several years, your resume might not include some of your biggest recent accomplishments.

When updating your resume, be sure to include clear stats to showcase your job achievements and impact. These numbers are easier to track down while you still have access to your work files and projects.

Scott Dobroski, a communications executive at the job search site Indeed, previously told Money that updating your resume is the single most important step to prepare for a layoff and job search.

“That is still a tool that almost every single employer will ask for, want or need,” he said.

See who’s hiring

Knowing which companies are hiring in your industry before a layoff happens is a great way to prepare and be able to act fast if you do lose your current job.

While you don’t necessarily have to start applying now, it doesn’t hurt to put some feelers out and make connections with hiring managers or workers at other companies.

Of course, if you find a great fit elsewhere before you lose your current job, nothing is stopping you from making the switch now. In fact, that could help your chances at finding a new job given that hiring managers often prefer candidates who are currently employed over unemployed job seekers.

Don’t panic

It might provide some solace to know that workers often overestimate the likelihood of getting laid off.

According to a Money analysis of a decade's worth of data from the New York Federal Reserve, when asked over the past 10 years, an average of 2.7% of workers said they expected to lose their current jobs imminently and would be left unemployed as a result. But that happened only 1.8% of the time.

Unless your company has already announced layoffs — or given clear signs like implementing job buyouts or major restructuring plans — panicking over potential future job cuts isn’t worth your emotional energy. It could also lead you to make some rash decisions.

So long as you have a plan for your finances and a fresh resume in hand, you'll be ready for whatever might be coming at work.

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