The Impact of Job Loss

Job loss is one of the most significant stresses that a person can face. Upon learning about a layoff, almost every area of your life can be affected. While a layoff affects each person in a unique way, there are certain areas of life that are almost always impacted to some degree or another. Termination from a job affects a person economically, emotionally, existentially, socially and within families.

Economic Impact

Economic concerns are a common and significant consequence of a layoff. Immediately after a layoff, people worry about obtaining income, paying the bills, and readjusting their household budget to account for their new economic reality. Once a plan and new budget are in place, concern shifts to the long-term economic impacts of the layoff. Common worries include: How long can I maintain these budget changes? Will I deplete my savings? Will I lose my house? How will my long-term financial goals (saving for retirement or college) be impacted?

Emotional Impact

People experience many emotional reactions to a layoff. Indeed, just the word “layoff” generates waves of emotion for many people. While these emotions may be uncomfortable and upsetting to you, it is important to realize they are normal reactions. However, if you find that any of these emotions become so intense and debilitating that they interfere with your daily functioning, seek professional support from your medical doctor or a mental health professional.

  • Shock, Disbelief and Denial
    A common reaction to hearing that you’ve been laid off is shock and disbelief. These feelings are frequently expressed in the thoughts such as: This can’t be happening; There must be some mistake; This is just a bad dream and everything will be okay when I wake up.
  • Anxiety and fear
    When shock and disbelief fades, many people experience fear and anxiety. Following a layoff, many aspects of life transition from the known and predictable to the unknown and frightening. Fear and anxiety are common reactions to confronting the unknown. People experience fear and anxiety about many things: paying their bills, maintaining their households, depleting their savings, losing their homes, finding new employment, telling others about their loss, thinking about the impact that their situation will have on their family and so on.
  • Sadness and depression
    As the reality of a layoff sinks in, feelings of sadness and depression can become common. A layoff can shake our feelings of self worth, personal security and personal control. In addition, people may have to give up activities and/or certain roles, have fewer social contacts, face disruption in daily routines, and find themselves separated from roles and rewards that give meaning or purpose to their lives. These self doubts and changes can lead to feelings of helplessness and depression.
  • Anger
    Anger is another common reaction to a layoff. Anger can be experienced in several ways. Some people find they are more easily irritated or frustrated after a layoff; others experience more frequent or more intense bursts of angry feelings. For a smaller but potentially dangerous subgroup, job loss triggers outright rage. Frustration, anger and rage typically flow from perceptions of unfairness, deprivation or threat. These feelings can be directed toward several targets: past employers, those who continue to be employed, one’s self, family members, neutral or uninvolved others or other perceived injustices.
  • Shame
    Many people experience shame after a layoff even when they’ve done nothing to bring it upon themselves. This feeling is often related to beliefs we have and assumptions we make about our situation. Sometimes shame relates to the belief that we may have failed as a provider, parent or person. It may result from the view that our job, as an indicator of social status and respectability, is now lost. Finally, some people experience shame after a layoff because they believe they should not feel upset or overwhelmed by it.

Social Impact

For many of us, jobs are social outlets through which we establish and maintain relationships. Many of these relationships are ones that we enjoy and rely upon. Job loss changes our relationships with those people with whom we share a large portion of our lives, a disconnection that can lead to feelings of loneliness and isolation. A layoff can also cause us to question the stability of those relationships.

Personal Identity Impact

Jobs are a significant part of our lives and identity; consequently, a layoff can frequently trigger a personal or existential crisis. People who identify themselves by their jobs may question who they are when unemployed. People who derive meaning and purpose from their work can feel emptiness and a lack of direction after a layoff. Limited financial resources after a layoff can cause some to question whether they have adequately fulfilled their personal responsibilities. Yet others may feel that a layoff and its financial consequences limit their personal freedom. Finally, a layoff can cause us to question assumptions we’ve made about how the world works. For example, if you believe that hard work is always recognized and rewarded, a layoff can cause you to reexamine that belief.

Family Impact

Although it’s you who has been laid off, your whole family is affected. A job loss can lead to changes in family roles, relationships and responsibilities, Even though your priority is finding a new job, you may have the opportunity to engage in new roles and routines in your household. This can help both you and your family after a layoff. It is important to remember, however, that these changes impact all family members. A family unit is a system, and everyone in the family must adapt to the changes. In terms of family relationships, a layoff can stress marital and parental relationships. A layoff also changes your spouse’s life, and he or she is likely to experience many of the same challenges and reactions as you. The increased stress and uncertainty can decrease spousal support and increase conflict. Parenting after a layoff can be challenging. Parents must find appropriate ways to let their children know what has occurred and to help them feel safe and confident that their family will cope with the situation. For helpful tips on managing family changes after a layoff, read the Family Survival Guide later in this article.