If You’re a Laid Off Software Engineer

So you got the sudden news. The company that you’ve been at, perhaps since you graduated high school, no longer needs your services. It’s emotionally difficult, and financially might be a problem. Here’s my loose thoughts on what to expect and how to recover.

TIME

The biggest thing to expect is time. It takes, on average, 6 months to find a new job. If you’re over the age of 32, it probably takes 18 months. Such is life. Your severance and state unemployment insurance will help — you’ll probably get enough money for your lifestyle to last, unchanged, for about 6-9 months. After that, your finances will start to severely weaken. It’s best to start looking at expenses you can cut immediately. What those are — it’s up to you. But look for monthly expenses you can cut. Don’t cut things that you need to keep your sanity. You’ll have a lot of free time, and you’ll need to fill it.

Finances

I am not a financial advisor. Don’t take financial advice from some random blog post on the internet. My personal opinion is that you should redistribute your investments towards passive income. You’re going to have to last a potentially long time, and passive income extends how long your finances will hold. I’m a fan of equity REITs, covered call funds, and income funds. It is possible to earn about 1% per month of your investment assets as passive income. Some sectors I avoid — mREITs and Nasdaq covered call ETFs, such as NLY or QYLD. These sectors have great dividends and can be good plays in the right time, but I’ve lost money on them. In a rising interest rate environment, mREITs, which play the float between borrowing and lending, lose a lot of book value, thus reducing their dividend safety. Nasdaq volatility also hits cash balances of covered call funds, and the Nasdaq tends to go down in value more so than other indices when interest rates rise. So, I personally would not rebalance into companies/funds in those sectors. I have had unusual good luck with S&P 500 covered call funds, Pimco and Guggenheim income funds, closed end option writing funds, and preferred stocks. Still, if you have $100,000 bucks in investment assets, you can get about $1,000 / mo in passive income. That is not risk free! Again, such is life. Some people augment those investment by writing covered calls or cash covered puts. That requires more expertise than I have — the few times I’ve tried those strategies, I have lost. However, “The Average Joe Investor” channel on YouTube does well with that option strategy — so it is possible to make it work. Take little risks as you rebalance and allow lots of time between moves. This is both for taxes — every sell can incur tax liability — and for risk management. Passive income creates a tax nightmare, and you often trade future growth for short term income. So, you’ll be balancing your immediate income needs against your future wealth.

Buying a business

One thing to seriously consider is buying an existing business using either seller financing or SBA loans. Look for a boring business ( but not a dry cleaner ) with an EBITA free cash flow of at least $100,000 / year. There is a YouTuber named “Codie Sanchez” with lots of advice about this path. I have not tried this path, but would seriously investigate this if I were laid off.

Creating a Startup

Some people create a startup after a layoff. This is a terrible idea. Your odds of success in this case are 1/400 to maybe 10/400. Those are not good odds. It takes, on average, 5-7 years for a startup to figure out how to generate predictable revenue and build a sales/marketing play book. It’s very tempting, especially for an engineer, to “build something” then try to sell it — a recipe for disaster. If you do make a startup, your number 1 problem is “meet people and talk to them” — not “build something”. This may be over YouTube, TikTok, Reddit, or in person. Then, you’ll find that the skills you need to solve the problems you discover are mismatched. The most common skill you really need are either “Full Stack Web Developer”, “Game programmer”, or “AI implementation engineer”. Whatever you were working on before layoff — it likely wasn’t in those three stacks and learning them will take a while. It takes a lot of time, energy, and money to make a startup actually work. It may take more people than just you. It is possible for this path to work — you might make a great startup — but the odds are very against you. If you do decide on this route — do job 1 first — talk to people. Lots of people. You need to have at least 50 real, human conversations before you build something.

Job Hunting

It’s very hard to find a job when you’re unemployed. Step 1 is “Don’t be unemployed”. Start a consulting firm and form an LLC. Employment verification services like “HireRight” look for government forms like a business license and / or W2/1099/K1 forms. Having the LLC and getting “Popcorn revenue” will help you market yourself better and pass employment verification hurdles. Owning a firm may disable your ability to collect unemployment in your state — so check with state laws first. In WA state, you cannot be an officer in a corporation and collect unemployment. This means don’t take titles at your cousin Bob’s moonshot startup with 0 pay — it will impact your unemployment insurance. Instead, check your local laws, form an LLC, and look for “gig coder” platforms like Upwork or rando consulting firms. That’s your best shot at getting an occasional gig, which both helps with revenue, and helps with employment verification when you do land your next W2 role. Do use a payroll processor to pay yourself like Gusto. You need third party paychecks to verify employment, and you can issue yourself a paycheck with these systems whenever you get an offer. Do a few tests first to make sure the system is working. Make sure to issue yourself a paycheck at least 1x per year.

Use LinkedIn. I have had very good luck with LinkedIn when looking for jobs because it lets me jump past HR and whatever AI of the day they are using to screen resumes. Send connection requests like mad to people with titles that you could report to, like “Principal Lead Software Engineer”, and say simply, “Hi <Person>. I was part of a recent big tech layoff wave and am looking for the next step. I know X/Y/Z. Do you know of any open roles or can point me in the right direction?”. Also, make posts and comment on other’s posts. Each post / comment will boost the number of recruiters who see your profile, and increase your inbound recruiter contact rate.

Use AI. Don’t know what to say? Ask chatGPT to help you. It can write your resume. It can write you a cover letter. It can write contact requests. It can write emails. It can even write code. You’ll find it a great resource to help you move forward in your job hunt.

Don’t get stuck on your title. Were you a “Senior Software Engineer”? Don’t apply for only “Senior Software Engineer” roles. This layoff may be a great chance to get your next promo, or change to nearby fields like management. Do keep your mind broad in your search.

Learn Stuff

While I advice against building startups, I do advise for “gig programming”. As you do it, you’ll learn that you don’t know enough. A good place I’ve found to learn new stuff is Udemy. Personally, I think Udemy’s per-course pricing is really good, and you can get good deals on the site. I also like the “pay once” model instead of the SaaS model other sites use.

Emotional Damage

You will take emotional damage. And while it’s hard to see — it’s not the end of the world. Avoid getting stuck, and instead, focus on a single metric like contacts / day or Applications / Day. You can switch the metric from time to time ( for example, in 2 weeks switch between applications / day to contacts / day ), but not too often ( say no more than 1 metric switch per week ). Then drive yourself to improve that metric. Landing on your feet is simply a matter of numbers. You need to have conversations, and some of those conversations will lead someplace.

Good luck — we’re all pulling for you!