Employers announced 43,281 job cuts in September, according to the latest Challenger, Gray & Christmas report, released October 1. That is the lowest September total since 2022. It is also small comfort if you were one of the people in the number. Announced cuts have fallen sharply this year, but layoffs are still happening every week, and people keep typing the same questions into search: what do I do now, do I get paid, what about my health insurance, and what is a WARN notice?
This guide answers those questions in the order they tend to come up. It covers the first 48 hours, the legal notice rules, severance, unemployment, health coverage, your retirement account, and the job search itself. It is general information, not legal or financial advice, and a lot of it depends on your state.
What the layoff numbers say right now
Start with the data, because it helps you judge how hard the next few months may be.
Challenger tracks layoffs that employers announce. Through September, those announcements totaled 573,195, down 39% from 946,426 over the same stretch of 2025. Technology led all industries with 165,925 announced cuts, followed by transportation at 44,430 and health care and health products at 37,417. Artificial intelligence was the most-cited reason year to date, named in 120,136 announcements, about 21% of the total.
Hiring is the weaker half of the picture. Challenger counted 90,787 planned hires in September, down 23% from a year earlier and the lowest September figure since 2011. Retail accounted for most of them, which mostly reflects early seasonal hiring.
The Bureau of Labor Statistics sees a different slice. Its JOLTS report for August, released September 29, showed about 1.6 million layoffs and discharges, a rate of 1.0%, and about 7.1 million job openings. If you want to learn how to read that report yourself, see our guide to the JOLTS job openings report.
Key takeaways
- Announced layoffs are down from last year, but hiring plans are soft, so a search can take time.
- Federal WARN rules give 60 days’ notice only for larger employers and larger layoffs.
- File for unemployment right away. Severance does not automatically block it, but rules vary by state.
- You generally have 60 days to pick a health plan and 60 days to complete an indirect 401(k) rollover.
- Do not sign a severance agreement on the spot. Ask for time and read the release.
Two cautions. Challenger counts announcements, not confirmed separations, and national figures say little about your occupation or city. For more on how the monthly data works, see our explainer on the monthly jobs report.
The first 48 hours: what to do before you leave the building
If you are told in a meeting, you may be walked out within the hour. If you get any time at all, use it on information, not goodbyes.
Ask these questions before you go
- When is my last day, and when does my pay and health coverage end?
- Is a severance offer coming, and when will I see it in writing?
- How will final pay, unused vacation and any bonus be handled?
- What happens to my 401(k), stock options or restricted stock?
- Who do I contact at the company after today, and how?
- Will the company provide a reference or a neutral job-title confirmation?
Write the answers down. If HR cannot answer on the spot, ask for the answer by email.
Save what you are allowed to save
Gather your pay stubs, offer letter, benefits confirmations, performance reviews given to you, and your own list of accomplishments. Do not forward confidential company files or customer lists. That can create legal trouble.
Do not sign anything yet
You may be handed a severance agreement in the same meeting. You are almost never required to sign it that day. Say something calm and neutral, such as the script below.
What to say if you are handed paperwork
“Thank you for walking me through this. I’d like to read the agreement carefully and have someone review it. How many days do I have to respond, and who should I send questions to?”
What a WARN notice is, and when you get one
The Worker Adjustment and Retraining Notification Act, known as WARN, is the federal law behind most of the “did my employer have to warn me?” questions. According to the Department of Labor, it applies to employers with 100 or more employees, not counting people who have worked fewer than six months in the last year or who average under 20 hours a week.
Those employers must give at least 60 calendar days’ written notice before a plant closing or a mass layoff affecting 50 or more employees at a single site. The notice goes to the affected employees or their representatives, the local chief elected official and the state dislocated worker unit. Regular government entities that provide public services are not covered.
The Department of Labor’s older worker guide adds some detail worth knowing. For a mass layoff of 50 to 499 workers, the cut must generally also equal at least a third of the site’s full-time workforce. Notice counts from the date you receive it. And the law does not recognize pay in lieu of notice as a substitute, though what an employer pays can reduce what it owes if it breaks the rules. That guide dates to 2003, so treat the thresholds as a starting point and confirm them against the current regulations.
When you might not get 60 days
Three situations let an employer give shorter notice: a faltering company that was actively seeking financing, unforeseeable business circumstances, and natural disasters. Even then, notice is supposed to go out as soon as practicable, with a statement of why it is shorter.
And plenty of layoffs never trigger WARN at all. A company with 60 employees is not covered. A 30-person cut at one site may fall below the threshold. A rolling series of small layoffs may or may not be added together, which is a question for a lawyer.
If you think your employer broke the rules
An employer that violates WARN can be liable to each affected employee for back pay and benefits for the period of the violation, up to 60 days, reduced by any notice given and certain voluntary payments. The Department of Labor says it administers the law but does not seek damages for workers. Enforcement happens in court, so a short consultation with an employment lawyer is the practical next step. Some states, including those with their own “mini-WARN” laws, add further protections. Check your state labor department’s website.
Severance: what to look for before you sign
Federal law does not require severance. If you are offered some, it comes from a company policy, a contract, or the employer’s wish to get a signed release in exchange. That last point matters, because it means the agreement is a legal document, not just a goodbye check.
What a typical agreement includes
Most agreements spell out the amount and how it is paid (lump sum or over time), the end date of your benefits, and a release of legal claims against the company. Many add confidentiality, non-disparagement, return-of-property, non-solicitation or non-compete terms that last beyond your last day.
Time limits for workers 40 and older
If you are 40 or older, a federal law called the Older Workers Benefit Protection Act sets timing rules for any release that waives age-discrimination claims. According to the Equal Employment Opportunity Commission, you must get at least 21 days to consider an individual agreement, or at least 45 days in a group layoff or exit program. After you sign, you have seven days to revoke, and that period cannot be shortened. The agreement must also name the Age Discrimination in Employment Act, advise you in writing to consult a lawyer, and cannot waive claims that arise after you sign. It cannot stop you from filing a charge with the EEOC.
If you are under 40, those specific timing rules do not apply, so the deadline in your offer is the one to ask about.
A quick review checklist
| Item | What to check |
|---|---|
| Amount and timing | Lump sum or installments? Does it stop if you start a new job? |
| Benefits | Does the company pay any COBRA premiums, and for how long? |
| Final pay | Are accrued vacation or bonuses included, or separate? |
| Release | Which claims are you giving up? Are there carve-outs? |
| Restrictions | Non-compete, non-solicit, confidentiality, non-disparagement: how long, how broad? |
| References | Will the company confirm dates and title, or give a reference? |
| Deadline | How long do you have to sign, and to revoke? |
| Equity | What happens to unvested stock and options? |
Can you negotiate?
Sometimes. Employers may not move on the headline number, but may have room on softer terms: extra weeks of pay, longer paid health coverage, a neutral reference, a longer deadline or narrower restrictions. There is no guarantee.
A short email to ask for more time and clarity
“Hello [Name], thank you for sending the separation agreement. I am reviewing it with an advisor and need until [date] to respond. In the meantime, could you confirm whether the company would consider [a longer period of paid health coverage / a neutral reference letter / narrowing the non-compete to X]? I appreciate your help.”
When a lawyer is worth it
If the package is large, you hold equity, a non-compete would block your field, or you suspect discrimination or retaliation, a consultation with an employment lawyer can be worth the fee. This is general information, not legal advice.
File for unemployment benefits right away
Unemployment insurance is a joint federal-state program, and each state runs its own. Per the Department of Labor, you generally must have lost your job for reasons outside your control, usually because work was not available, and you need enough recent wages or work time in a “base period.” The base period is typically the first four of the last five completed calendar quarters before you file, though states can add conditions.
How to file
- Find your state’s unemployment agency. File in the state where you worked. If you worked in more than one, the agency can tell you where to file.
- Gather your Social Security number, your employer’s name, address and dates of employment, and your reason for separation.
- File online, by phone or in person, depending on the state. File soon after you lose your job.
- Enter accurate details. Mistakes in addresses or employment dates cause delays.
- Keep up with weekly or biweekly certifications and any job-search requirements.
The Department of Labor says the first payment usually arrives two to three weeks after you file. Benefit amounts and duration are set by the state, so look them up there.
What about severance?
The rules differ. Some states count severance as income that delays or reduces benefits, and others do not. Do not decide on your own that you are ineligible. File, report the severance honestly when asked, and let the agency make the call. Waiting can cost you weeks of benefits, because states control effective dates and backdating.
If your claim is denied, you can usually appeal, and there are deadlines. The denial notice should explain how.
Final paycheck, vacation and expenses
The Department of Labor says federal law does not require an employer to hand over a final paycheck immediately. Some states do require prompt or immediate payment, and the deadlines differ, so check yours. If the regular payday for your last pay period has passed and you have not been paid, the DOL advises contacting its Wage and Hour Division or your state labor department.
The same goes for unused vacation. The Fair Labor Standards Act does not require payment for time not worked, such as vacation or sick leave. Whether you get a payout depends on state law and company policy. Check your employee handbook and the severance paperwork.
Also ask about expense reports. Submit any outstanding reimbursements before your system access ends.
Health insurance: Marketplace, COBRA and other options
Losing job-based coverage is usually the most time-sensitive part of a layoff after unemployment. Know when your coverage ends, because it may be the last day of your employment or the end of that month.
Option 1: A Marketplace plan
HealthCare.gov says you generally have 60 days from losing job-based coverage to apply for a Marketplace plan through a Special Enrollment Period. If you enroll after your coverage ends, your new plan can start the first day of the month after you pick it. Premium tax credits can lower your monthly cost, and they are based on your estimated household income for the full year, including pay you earned before you left. You may also qualify for Medicaid or CHIP.
Option 2: COBRA
COBRA lets you stay on your old employer’s plan, but you generally pay the entire premium. The Department of Labor says the total is the employee share plus the employer share, plus 2%. It generally applies to private-sector employers with 20 or more employees, and some state “mini-COBRA” laws cover smaller ones. Coverage for a job loss usually lasts up to 18 months.
Key dates from the Department of Labor’s FAQ:
- You have 60 days to elect COBRA, counted from the later of when coverage ends or when you get the election notice.
- After electing, you have 45 days to make your first payment.
- Coverage is retroactive to the day you lost your plan, so you can wait to see if you need it. But you must pay for those months if you elect.
How to choose
| Question | Marketplace | COBRA |
|---|---|---|
| Who pays? | You, with possible tax credits | You pay the full premium plus 2% |
| Same doctors and plan? | Plans and networks may change | Same plan as before |
| Decision window | 60 days after coverage ends | 60 days to elect |
| Tax credits? | Possible, based on income | No |
| Good fit if… | Your income dropped and you want to lower costs | You are mid-treatment or have met your deductible |
If you are in the middle of treatment or have nearly hit your deductible for the year, COBRA’s continuity can be worth the cost. If money is tight, price both. You can preview Marketplace costs on HealthCare.gov. A spouse’s or partner’s employer plan is another route. Ask that employer for its deadline.
What to do with your 401(k)
You can usually leave money in your old employer’s plan, roll it into a new employer’s plan or an IRA, or take it as cash. Cash is almost always the costliest choice.
The IRS says you have 60 days from the date you receive a distribution to roll it over. If the plan sends the money straight to an IRA or another plan, that is a direct rollover, and no tax is withheld. If the money is paid to you first, the plan must withhold 20% for taxes. To roll over the full amount, you would have to replace that 20% from other funds. Any taxable amount you do not roll over may also face a 10% additional tax on early distributions, unless an exception applies.
If your balance is between $1,000 and $5,000 and you do not choose an option, the plan may move it to an IRA in your name. Smaller balances may be paid out to you less withholding. Respond to plan notices, because the default may not be what you want. Also confirm that a new plan accepts rollovers before you plan on it.
This is general information, not tax or investment advice. If you have a large balance, a loan outstanding or company stock in the plan, a fee-only advisor or tax professional can walk through the specifics.
Build a simple cash plan
In the first week, list your fixed bills, add expected income (benefits, severance installments, a partner’s pay), and divide your savings by the monthly gap to see your runway. Call lenders early, because hardship programs usually require you to ask before you miss a payment. Be careful with high-interest borrowing and early retirement withdrawals.
Restart the job search without burning out
A layoff is not a verdict on your work, and hiring managers know that. Still, a few moves help.
Week one: set the foundation
- Update your resume with quantified results from the role. Our guide on tailoring your resume for every application shows how.
- Refresh your LinkedIn headline and turn on the setting that signals you are open to work, if you are comfortable with that. Our guide on whether to turn on LinkedIn Open to Work compares the public and recruiters-only options.
- Tell former managers, teammates and clients, and ask for specific introductions rather than “let me know if you hear of anything.” The article on asking for a job referral without feeling awkward has scripts.
- Set up a tracker. A job application tracker in a spreadsheet keeps follow-ups from slipping.
Weeks two to four
Settle into a weekly routine of tailored applications and conversations with people. Beware of postings that never lead anywhere; our piece on ghost jobs explains how to spot them.
Explaining the layoff
Keep it short, factual and forward-looking. Something like this works in most interviews.
Explaining a layoff in an interview
“My team was part of a company-wide reduction in [month]. I’m proud of what we delivered, including [one result]. I’m now looking for a role where I can bring that experience to [what you want next].”
Do not criticize your former employer. If there is a gap, our guide to explaining career gaps on your resume covers the wording.
Common mistakes after a layoff
Mistakes that cost people money
- Waiting to file for unemployment because severance is coming.
- Signing a severance agreement without reading the release, restrictions and deadlines.
- Letting the 60-day health coverage window pass.
- Taking a 401(k) payout in cash when a direct rollover was available.
- Assuming WARN applies without checking employer size and layoff size.
- Ignoring mail or email from the plan administrator, state agency or HR.
- Deleting emails and documents that show your pay, role or termination reason.
- Posting angry comments about the company while negotiating.
The bottom line
A layoff comes with a surprising number of clocks. The good news is that most of them can be handled in a single afternoon if you know what to look for.
Your next steps:
- Write down your coverage end date, last day and any promised severance terms.
- File for unemployment this week.
- Ask for time to review the severance agreement, and have a lawyer look at it if the stakes are high.
- Compare Marketplace and COBRA costs before your 60-day windows close.
- Roll your 401(k) directly to avoid withholding and taxes.
- Update your resume, tell your network and start a weekly search routine.
Rules differ by state, and agencies change forms and deadlines, so confirm details with your state labor department, the Department of Labor, and a qualified professional before you act.
