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Don’t Get Fired Or Quit, Get Laid Off Instead

Updated: 12/06/2022 by Financial Samurai 202 Comments

Don’t get fired or quit your job. Instead, get laid off. If you quit or get fired, you get no benefits. But if you get laid off, you can receive a severance, unemployment benefits, subsidized health insurance, strong referrals, and so much more.

A baby panda dies in the woods every time you quit your job or get fired. It is so much better to negotiate a severance and leave on your own terms with money in your pocket!

Another recession is likely coming due to aggressive Fed rate hikes. As a result, you may have more opportunities to negotiate a severance by getting laid off.

Big Difference Between Laid Off And Fired

First of all, there’s a big difference between getting fired and getting laid off. In addition, there’s a significant difference between a person who gets laid off by surprise versus someone who is able to negotiate a severance.

Most of what you read in the papers is about people getting laid off due to a “reduction in force,” or RIF as many companies call it nowadays. Getting fired is almost always due to cause.

You may have sent out a blast e-mail with company secrets by mistake. Or perhaps you said some sexist joke about women when the female HR manager so happened to walk by. Whatever the case, you don’t want to get fired, nor should you quit if you don’t have to.

People don’t get fired because there’s a big recession and the CEO says 10% of its employees must go. People don’t get fired when there is a reorg. These people are getting laid off without cause. As a result, a severance is often given.

Reasons Not To Quit Or Get Fired

The vast majority of workers quit their jobs when they want to start a new job, go back to school, etc. Most people don’t think there’s any other way. It’s a herd mentality.

On the other hand, those who learn how to negotiate a severance are open minded individuals. They are not afraid to think outside the box. To help explain why it’s not ideal to quit or get fired, here are some unexpected negatives.

If You’re Fired Or Quit, Many Bad Things Can Happen

1) You will not be eligible for any unemployment benefits. The logic behind this is simple. You did something wrong that forced your company to fire you. Or you voluntarily quit your job. Hence, it is your own fault you are unemployed!

2) You might have a black mark on your record if you are fired. Word can travel fast. Thus, you’ll likely be passed over by future employers. No firm wants to risk hiring someone who was previously fired.

3) You may lose supporters and mentors who would have otherwise written letters of recommendation for you. They might not want to risk their reputation on quitters or miscreants.

4) You might die alone. Few things in life are worse than dying alone. If you don’t have a job and don’t have a backup plan, who will want to be with you for the long term?

Get Laid Off And Make More Money

Now that you realize the downside of getting fired or quitting, you should logically seek an alternative. If you just can’t stand the company you are working for anymore, figure out a way to get laid off of course!

If you want to leave your job, get “riffed” and negotiate a severance package. Don’t just quit and walk away with nothing. Cashing out smartly is the way to go.

Here are some of the main reasons why it’s beneficial to negotiate a severance and ask to get laid off.

Reasons To Negotiate A Severance

1) Getting laid off typically you eligible for government unemployment benefits. Here in San Francisco, you can get up to $900 every two weeks. That’s $1,800 a month for at least 26 weeks.

2) You may get severance. Many companies offer one to three weeks per every year worked. Please note that severance is completely at the discretion of the employer and is not required by law.

3) If you have deferred compensation in the form of stock or cash, you are eligible to receive these assets during the scheduled time table. My friend Paul, for example, has around $400,000+ in deferred compensation he loses if he quits!

4) You can get all your unused vacation days paid. If you quit there’s no guarantee you’ll get them. You may even receive unused sick days, but that is very rare.

5) You will have no black marks on your employment record. This is key if you want to get back into the game at a future time.

6) You can get COBRA (healthcare) coverage for at least month and often times 3-6 months fully paid for by your employer. Legally, most companies must provide the option for COBRA for 18 months after separation. You most likely have to pay the monthly premiums after the initial grace period. It all depends on how well you negotiate.

How To Get Laid Off With A Severance

Let’s say you’ve been working at your company for five years, and you’ve decided selling vacuum cleaners no longer interests you. You are a bit burnt out, and you wish to take a three month break in between jobs to recharge.

You can’t just quit because you’ll lose out on 10 weeks of severance pay. In addition, you won’t be able to receive unemployment benefits or health care.

Instead, negotiate a severance package and get paid to take your three month break.

Steps To Negotiate A Severance

Here are some ways and thoughts to get laid off:

1. Google “WARN notification your state” 

Then search by your company. WARN stands for “Worker Adjustment and Retraining Notification” where a company legally must file with the state if they plan to do a mass layoff.

The goal is to provide potentially laid off workers time to adjust to a job loss (2 months in California, 3 months in New York for example).

2. Talk to your manager about the company’s staffing levels

“Bloated, lean, just about right?” Basically tell her that you empathize with how difficult her decision must be to lay people off, and ask how she copes?

As the dialogue ensues, bring up a suggestion that you are willing to sacrifice your position for the good of the firm if she is asked by senior managers to choose people to layoff.

This way, you seem like a good team player. You should also make clear that with your sacrifice, you wish to receive severance and any deferred compensation you might have.

Being a manager is very difficult during rough times. If you can help managers make some difficult decisions for them, more often than not, they will accept your proposal.

 If you ever wonder why C-level execs hire consultants like McKinsey for strategic reviews, now you know why. The consultants are often the scapegoats for letting go of staff, so the blame doesn’t go on the big bosses.

Of course, if you are one of the top performers, they will make it difficult for you to leave, and might ask how they can help make your life better and might even give you a raise.

Quitting your job is selfish. Getting laid off is the more thoughtful way to go.

3. Bring up the topic of a sabbatical with your manager

There’s never really a good time to ask for one. When things are busy and booming, the last thing the company wants is for an employee to take a nice 3 month long break.

When things are bad, your manager will think you’re being thoughtless and foolish with your career. That’s fine, since you want to get laid off anyway! 

You can recharge and enjoy your time off, and if you get back and find yourself laid off, then what a fine choice. Here’s a post that goes through the decisions on whether to take a sabbatical or not.

4. Fade to mediocrity

This is a riskier strategy that must be tactfully managed. Companies let go of their bottom 5-10% performers every year. Some call it the “Jack Welch Rule” from GE. 

So long as you are one of the average 70-80% of employees, you’ll likely never be let go. Falling to the bottom 10% in performance requires: not being a team player, but still being nice e.g. “Sorry, can’t stay late, gotta go!“, being out of sight, not feeling you’ve put in your best work, and maybe even arriving 15 minutes late at times.

Be very careful not to do anything wrong. Most people at firms are mediocre, so don’t feel bad. You can adopt the quiet quitting movement.

5. Become disliked, but not hated

Another strategy to get laid off with a severance is to become disliked. Are you the type of person who likes to whistle at your cubicle to the agitation of your colleagues? Do you like to bring back from breakfast or lunch the stinkiest meal possible and disgust your neighbors?

Well then, you are on the right path for getting put on the “RIF List.” I’ve had a couple managers tell me they can’t stand someone because of their loud noises and whistles.

Because they can’t stand that person, the manager finds nitpicking things to justify a RIF. As the annoying person, you should continue to be nice and smile.  Just be a little oblivious.

6. Use the “It’s not you it’s me, but really it’s you” strategy.

When you’re afraid to let someone down who loves you more than you love them, employing this strategy works. Here’s a whole post on how you can lessen someone’s pain during breakup.

Important: It’s really all about planting a seed of doubt in your manager’s mind. Once your manager thinks you’re a pain in the ass, annoying, or not pulling your weight, you will have a very difficult time convincing him or her otherwise.

People are naturally biased and will find reasons to let you go if you sufficiently bother them. For example, if your manager is a Republican, you can mention you are going to a Democratic fund raiser. Totally legal, but you will crawl under your manager’s skin to the point where all he’ll think about is finding ways to legally get rid of you!

Avoid These Mistakes To Get Laid Off

* Do not write anything in e-mail that could condemn you to getting fired. Assume all your e-mail are read. If you are embarrassed to read your e-mail on the front page of the newspaper, the e-mail is not legitimate and should not be written.

* Do not abuse your corporate card or any channel where you can spend the firm’s money. You should never abuse your corporate card anyway. All expenditure must be above board.

* Do not harass your colleagues. This is a given. Now is not the time to go hit on the hot tamale at the other end of the floor. Many companies have a non-interoffice dating policy.

* Do not come in late or leave early more than once a week. Companies can terminate you for being incessantly late, so don’t slack too much.

* Read your employee handbook. There are many dangers you must avoid that are contained in the hand book.

Don't quit your job, get laid off instead

Empower Yourself With Knowledge

Getting laid off can be a wonderful thing if you have other things planned. The better an employee you are, the harder it is for you to engineer your layoff because you are clearly more valuable to the firm than what they are paying you.

Also, if a manager lays you off, by many state laws, they can not replace you with another candidate for a certain time period because that would violate the reason for a layoff. If you are a bad employee, you should probably be fired, but that opens up reputational risk to the firm as well as litigation risk.

Getting Laid Off Has Benefits

If you are thinking about quitting your job, please at least attempt to engineer a layoff instead. You may get severance, all your deferred compensation, healthcare coverage,  as well as unemployment benefits from the government.

This is real money that shouldn’t be taken lightly, since there’s no guarantee that after the layoff you’ll succeed in whatever new thing you want to do. Besides, after all these years of paying taxes, don’t you want at least some of that money back?

Although your employer pays the unemployment insurance directly on your payroll, you are still indirectly paying for unemployment through a lower wage equivalent to the tax they must pay!

Sooner or later, our careers end. If you want your career to end sooner, consider getting laid off instead of quitting or getting fired. And if you have an incredible opportunity lined up already that will pay you handsomely, go ahead and quit. Just make sure you know what you’re missing if you do!

Note: It is very important to work together with your HR staff. The HR staff’s main purpose is to protect the company from litigation and NOT you. Remember who pays the HR staff’s compensation. Finally, a severance comes with you signing a document protecting the firm from you. In essence, a severance package is like hush money. 

Recommendation For A Better Life

If you enjoyed this article, I wrote a comprehensive 200-page ebook entitled, How to Engineer Your Layoff. It teaches people like you how to get laid off profitably. The book is updated for current times.

I go through the framework of how to negotiate a severance package in further detail. There are lots of case studies, negotiation tips, and guides to help you plan and execute a severance package.

Corporations have a team of lawyers and HR professionals looking out for their own interests. On the other hand, employees have to fend for themselves. I’ve taken in feedback from thousands of readers to make this book as impactful as possible.

How To Engineer Your Layoff is here to help those who feel they are at risk of getting let go, or who simply want to leave. Everybody whom I’ve coached or spoken to has said that engineering their layoff feels like winning the lottery. In my case, my lottery ticket amounts to six years of living expenses.

Add to Cart

Special Promotion For How To Engineer Your Layoff

For another example, you can see my wife’s case study on high she negotiated a six-figure severance as a high-performing employee. Never quit your job, get laid off instead. You will feel like you won the lottery as you move on to do something new.

As a special promotion, if you order five hard copies of my instant Wall Street Journal bestseller, Buy This, Not That: How To Spend Your Way To Freedom And Wealth, I will send you a copy of How To Engineer Your Layoff for free. Just e-mail sales @ financialsamurai DOT com.

For more nuanced personal finance content, join 55,000+ others and sign up for the free Financial Samurai newsletter and posts via e-mail. Financial Samurai is one of the largest independently-owned personal finance sites that started in 2009. 

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Filed Under: Career & Employment

Author Bio: I started Financial Samurai in 2009 to help people achieve financial freedom sooner. Financial Samurai is now one of the largest independently run personal finance sites with about one million visitors a month.

I spent 13 years working at Goldman Sachs and Credit Suisse (RIP). In 1999, I earned my BA from William & Mary and in 2006, I received my MBA from UC Berkeley.

In 2012, I left banking after negotiating a severance package worth over five years of living expenses. Today, I enjoy being a stay-at-home dad to two young children, playing tennis, and writing.

Current Recommendations:

1) Check out Fundrise, my favorite real estate investing platform. I’ve personally invested $810,000 in private real estate to take advantage of lower valuations and higher rental yields in the Sunbelt. Roughly $160,000 of my annual passive income comes from real estate. And passive income is the key to being free. With mortgage rates down dramatically post the regional bank runs, real estate is now much more attractive.

2) If you have debt and/or children, life insurance is a must. PolicyGenius is the easiest way to find affordable life insurance in minutes. My wife was able to double her life insurance coverage for less with PolicyGenius. I also just got a new affordable 20-year term policy with them.

Financial Samurai has a partnership with Fundrise and PolicyGenius and is also a client of both. Financial Samurai earns a commission for each sign up at no cost to you. 

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Comments

  1. delightful muzi says

    October 7, 2020 at 6:38 am

    Hello there.

    It’s funny how I was thinking of doing the same thing, then find years of work done on the exact topic.

    A question though.. I am in my mid career with 6 YOE. I’ve been engineering to be a low performer and about to press the nuclear button to be let go. My concern is that when I get a job somewhere else, the HR may give out my information on how I was let go.

    Is there a way to prevent the HR leaking my performance review to a potential new employer?

    Reply
    • delightful muzi says

      October 7, 2020 at 10:57 am

      Not sure if the editor of this blog will reply to my comment, but I just pulled the trigger today. I spoke with my manager, and my manger first laughed. Then he realized that I was being serious and told me to just resign as this may look bad in the future.

      I insisted that I prefer layoff and emphasized that this is a win-win for both of us.

      Now I wonder how this will go. He said he will speak with others and get back to me.

      Reply
      • Financial Samurai says

        October 7, 2020 at 12:07 pm

        You have little downside b/c they can’t fire you for cause if you didn’t do anything bad. You need to know offer your services for a smooth transition. I talk about all the strategies in my book.

        Reply
        • delightful, yet salty muzi says

          October 8, 2020 at 3:37 pm

          Just an update.

          I got a call from HR today and got terminated for cause(job abandonment) effective today. They used my use of sick days against me (and we have unlimited sick days lol). Well, HR sure can use whatever to create a cause I guess.

          Not super mad as a new job is waiting for me, just little salty as I could’ve collected the pay check for another week. I am just not sure how far I am gonna take this to fight against my former asshole.

          Any thoughts?

          Reply
  2. Nort says

    September 3, 2020 at 3:53 pm

    The company that I currently work with, just offeed a voluntary resignation with benefits of severance package and EI approval. I am thinking that Volunteering on it is the same as quitting? Will job loss insurance (credit card/loan protection) will consider it as quit or lay off? I am just worry that they will deny my claim, even if the Reduction in Workforce was approved by Employment Insurance…

    Reply
    • Financial Samurai says

      September 3, 2020 at 5:39 pm

      Ask them.

      Reply
  3. Jen Preston says

    September 15, 2019 at 10:47 am

    You crack me up! Thanks for (living this?), culling the info, and posting.

    Reply
  4. Laura says

    January 31, 2018 at 10:57 am

    Getting fired is not the black mark everyone makes it out to be. WHY is the tricky part. Many people get fired or terminated and unless you did something really bad, unemployment can usually be gotten, even if you have to pay $1200-$2000 for an attorney to handle the appeal.
    Of course, you don’t want to make a habit of it.

    Reply
    • Mike says

      November 14, 2019 at 5:29 pm

      Exactly! Get creative as to the why without fibbing-place as much positive in it as much as possible.

      Reply
  5. Tech Worker says

    November 20, 2017 at 5:47 pm

    I will buy your book tonight but I have an interesting situation. I am considering negotiating a voluntary severance as I am looking at buying a business. So I might leave anyway. Of course I wont bring that up but in my roll out I think I will first just ask for a package. At some point it might be a game of chicken/poker with the company daring me to quit versus me daring to quit…

    I am late 50’s and have mildly complained the last year about being excluded from higher level meetings, though recently i am now invited, so I dont think I have performance issues…

    I have subscribed to your newsletter for a few years, it is really great, love every post
    thanks Sam
    Tech Worker

    Reply
  6. Benjamin Turner says

    October 9, 2017 at 9:34 am

    I’ve just recently found your blog and have really been enjoying reading through these posts — thank you!

    As a contractor doing web development, my experience has been different – no employer paid benefits, and no deferred compensation (like stock options). It’s just me connecting those dots.

    Last year, most of the work I was doing was with a specific agency. I enjoyed the company for the most part, but was getting bored and uninspired with some of the projects being thrown my way.

    I considered quitting, but instead I crafted an email articulating all the ways in which I was a vital part of the organization — and as such required an extreme increase in my hourly rate.

    After a bit of negotiation, they accepted. I learned that I had been undercharging for too long, but there were also a few interesting consequences:

    * Because I am now so expensive, I am only being asked to do the really “hard stuff” — things that are challenging and engaging for me, as opposed to things that are just re-inventing the wheel.

    * I am working less hours, but getting paid more.

    * With more free time, I am able to focus on spending time with my new born son along with growing my other side projects!

    Reply
  7. Robert says

    April 10, 2017 at 12:08 pm

    I’m in a senior level management position with a large corporation. I’ve had discussions with my manager regarding future restructuring in our division. He is being tasked to reduce cost (in this case headcount) by 5% next year. It is obvious after discussing with him he will not need me in my current position under the new structure but says he will not make a decision until the year end. I’m not willing to take a step back or reduce my compensation, which looks like will be his recommendation as he considers me too highly compensated for a lower position. I’m also not willing to wait until year end. I’m considering suggesting to my manager to make me redundant so he can meet his cost savings for next year but I’d prefer he do it now opposed to year end. I have 16 years with this company and have moved over seas for them with a proven track record and good performance. Any advise or guidance you can give me will be greatly appreciated. Best regards, Robert

    Reply
    • Financial Samurai says

      April 10, 2017 at 12:37 pm

      Hi Robert, what specific questions do you have for me regarding my book’s strategies? Thx!

      Reply
  8. SallyMae says

    March 30, 2017 at 11:36 am

    Hi there!

    So I’m in a sticky spot. I have a good amount of money in unvested stock. There are rumors that the company I work for may be acquiring another company (our competitor), which would make us the largest player in our space. An article I read stated that our stock could double to triple if this event were to take place. I had worked closely with one of our c-suite folks on a rather large effort when I joined the company, so I can reach out to this person anytime and it’s not a big deal. I was offered a position to the company I worked for prior to the one I’m working for now, and to add to that my former company use to own my existing company. I setup a meeting with my c-suite contact and was going to ask if I could be laid off and have my unvested stock accelerated to vest. What do you thing is the best approach to ask this. Side note, c-suite contact is retiring at the end of this year.

    Reply
  9. sarah says

    January 31, 2017 at 7:34 am

    I just found out my job is being eliminated and I am being laid off (with a NUMBER of other employees). I am about 6 weeks pregnant. A new Maternity policy went into effect Jan 1, 2016 with 14 weeks paid, and up to 6 months of job protection. I JUST missed this policy with my first, born 9/2015. I have 8 years with the company. I receive 16 weeks severance and am being paid for those 16 weeks to help pay for COBRA. How do I ask (demand) for 14 weeks paid maternity, in addition to my package from HR, since any new Job I find (IF I can get hired while pregnant…seems like a slight chance), I will be ineligible for any decent maternity due to my short length of employment at a new company.

    Do I have options? I am a female millennial, and my company implemented the new maternity policy to ATTRACT millennials, and have been pushing in all our company meetings they want more women, and more millennials! What gives?

    Reply
    • Financial Samurai says

      January 31, 2017 at 7:41 am

      Hi Sarah, do they know you’re pregnant? If not, you should bring it up. You have nothing to lose now since they are already laying you off. With new information, they should be flexible to change some of the terms.

      Reply
  10. Merou says

    February 2, 2016 at 8:49 pm

    what about a fake burn out ?

    Reply
  11. Young Dole says

    January 9, 2016 at 8:12 pm

    What would happen if you work for a company for more than 15 years and got laid off. They gave out no handbook to employees. Is there any chance that you can receive severance package? Or what do you need to do to receive it?
    Please reply. Thank you

    Reply
  12. Angela says

    December 3, 2015 at 10:13 pm

    I was working for a manufacturing company since May 2015 they laid me off in September and i had signed the paper stating i was laid off. Than realize i didn’t have a reason i called the company and spoke to the lady who laid me off. I told her i needed a reason why so i can file unemployment. She told me to go back the next day to get another paper. When i go back she gives me the paper but added the reason to the one i had already signed. And the reason i didnt agree to it because i was never written up or talk to. 3 days later they rehired me and kept me for 2 months its now December and i asked for a reason why and she mentioned that she didnt need to tell me so i didn’t sign the paper. Am i suppose to be given a reason stating why im laid off?

    Reply
  13. Miki says

    September 10, 2015 at 7:42 am

    I am no longer interested in working for my company (9 years) because my manager started to micromanaging me to the point that I feel I am being bully. Can I just go to HR and ask for a package and leave? He has two people report under him, yet, he bother me constantly and leave the other one alone (that person has tide to the VP). I feel like I am being watch on everything I do. When I worked 20 hours per day (yes, that is the correct hours) on a project, he wouldn’t bother me, now the project is over, he has nothing else to do and start to bother me. He is trying to make me quit (going through a re-org again slowly) and it’s working.

    Reply
  14. scott says

    September 3, 2015 at 4:55 am

    Well, I got laid off. Not by choice though. Not sure what I should do next. I have about 1MM net worth – 700k invested 300 k house. 3 kids and a stay at home wife…. Here is Canada we get a monthly child benefit of about $400…

    I can collect EI for the next 10 months

    I have considered calling it a day – my wife is willing to go back to work and can add about $1000 month to the pot… not sure..

    Reply
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