It’s only the first quarter of the year but already layoffs are making financial headlines. Tens of thousands –and more each day–of traditionally secure government employees are finding themselves with a pending layoff. As someone who has worked with employees of varying businesses and entities for over two decades, here are my valuable tips on what to do if you’re facing a job loss.
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According to a recent Forbes article and the Bureau of Labor Statistics (BLS) and the Office of Personnel Management (OPM), government job cuts reported across multiple federal agencies number more than 35,000! They include more than 5,000 from the Department of Education, 4,000 from the Department of Energy, 3,500 from the Department of Transportation, more than 5,000 from the IRS, tens of thousands more expected from the Department of Defense. More than 15,000 federal contractors also have been cut. Taken together, they represent a federal workforce decline of 2.5% in the first quarter of 2025, according to the federal Office of Personnel Management. The cuts stem from efforts to streamline government operations and a spending cap agreement passed by Congress.
Know that private-sector layoffs are happening too: According to the federal Bureau of Labor Statistics, Layoffs.fyi, Bloomberg and various company reports, there are plenty of job cuts in the private sector. Some examples: Google (Alphabet Inc) shed 12,000 positions, Amazon, 18,000; Citigroup, 6,500; Walmart, 7,000; Disney, 5,500; Ford, 4,200; Warner Bros Discovery, 2,000 plus; Paramount Global, 1,800. Job cuts across all industries in the first two months of this year totalled more than 250,000! Unemployment claims rose 12% since January, according to the BLS Weekly Unemployment Report).
Be aware that laid-off workers usually are entitled to severance pay and benefits: Federal government employees may receive up to one week of pay per year worked, while private workers are entitled to an average weekly state benefit of $450. The amount varies by state but is typically 40% to 50% of your previous salary for up to 26 weeks. Apply right away because it can take two to four weeks to start receiving benefits. Find your state’s unemployment application portal: U.S. Department of Labor.
Explore options for health insurance after job loss: COBRA programs allow a laid off worker to continue for up to 18 months on an employer’s health insurance plan but it’s expensive because the worker must assume the full share of the monthly premium. A better bet might be the marketplace plans offered under the federal Affordable Health Care Act. You can explore the possibilities at Healthcare.gov. The best option, if available, is to join a spouse’s company health care plan. If your income drops drastically, you may qualify for free or low-cost coverage through Medicaid. (Check eligibility through your state’s health department.)
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Understand severance benefits: If you receive a layoff package from your employer, study the details for severance pay, unused personal time payout, stock options, and other possible benefits. Check into pension and retirement savings plans. Use any unused sick days and wellness benefits before your last day on the job. Negotiate if possible, as some employers may offer more severance, extended healthcare or a delayed layoff date. If you have a health savings account, know that you can use your balance for medical expenses even after leaving the job.
Do budgeting and gather emergency savings: Cut non-essential spending (subscriptions, dining out, luxuries. Prioritize debt payments and contact lenders to see if you can get a payment deferment or a lower interest rate. Use emergency savings wisely and avoid withdrawing from retirement accounts unless absolutely necessary. Evaluate your financial situation, including amount of debt, amount of savings and all your monthly expenses. If you have time before your job ends, beef up your savings while you still are getting a paycheck. If you own a home, consider taking out a home equity line of credit (HELOC) while you are still employed. See your financial planner for ideas to help bulk up your emergency fund.
Begin your job search and networking skills: Update your resume and LinkedIn profile with relevant skills. Reach out to former colleagues for job leads and referrals. Consider gig work, freelancing, or remote jobs for immediate income.Explore upskilling and career pivoting: Enroll in online courses to gain new skills (LinkedIn Learning, Coursera). Consider high-growth job sectors (AI, cybersecurity, healthcare, renewable energy). Explore federal retraining programs available to laid-off government employees (DOL Workforce Programs).
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Prepare mentally for the change that comes with a layoff: Stay positive and proactive. Layoffs are often not personal but are done for economic reasons. Set daily goals–for the number of job applications filed, time for networking and for building new skills. Seek emotional support from family,friends or support groups as you navigate your transition.
Learn a bit more about DOGE: Created by an executive order shortly after President Trump took office, the Department of Government Efficiency (DOGE) brings a new, controversial wrinkle to a broader effort to reorganize government and cut costs. The initiative to restructure and modernize technology aligns with ongoing federal layoffs as part of this effort. The U.S. DOGE Service Temporary Organization is intended to exist until July 4, 2026, to execute the 18-month modernization agenda. Every federal agency and department was required to create a DOGE team to lead its restructuring cost-cutting efforts.
Know the options for laid-off federal employees: They can use the Career Transition Assistance Program (CTAP) for priority job placement. Search USAJobs.gov for new federal job opportunities in high-demand fields or consider private sector roles in tech or consulting.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
The financial advisors at Sun Group Wealth Partners are registered representatives with and securities offered through LPL Financial. Member FINRA/SIPC. Investment advice is offered through Sun Group Wealth Partners, a registered investment advisor and a separate entity from LPL Financial.