Preparing for layoffs before it's too late

Attendance was mandatory and in person. Human resources staff were also to be present.

One person added a brief comment before the post was hidden: The update was about laying off engineers.

I don't know when it will be my turn to get called to a meeting like that.

I work in IT for a foreign-invested company, and I've never assumed my job was secure.

Looking at Microsoft's overall picture, the reported layoffs in Vietnam are nothing unusual. At around the same time, the company cut several dozen jobs at its development center in Israel.

In early July, Microsoft announced plans to eliminate around 4,800 positions, roughly 2% of its global workforce, followed by another 600 layoffs in late September.

A company spokesperson said Microsoft regularly adjusts its team structures to reflect changing priorities.

For a corporation, constantly reorganizing its workforce makes business sense. When priorities change, the organizational chart changes with them. No management team will keep a department just because it has always existed.

Microsoft has also said it remains committed to the Vietnamese market and will support affected employees. But that statement needs to be understood for what it is: A commitment to the market.

An employment contract, no matter how prestigious the company in question, has never been a promise of a permanent job.

My industry is at the top of the layoff list.

In the United States, according to outplacement firm Challenger, Gray & Christmas, technology recorded the most job cuts in the first nine months of this year, with nearly 166,000 positions eliminated, or almost three in every 10 people laid off.

Those of us working for foreign companies in Vietnam rarely have a seat in the room where such decisions are made, and I'm no exception.

The only thing I can control is how prepared I am when that meeting invitation arrives.

So I keep asking myself: If I lose my job tomorrow, what will I have left?

Workers at an electronics company in northern Vietnam. Photo by VGP

The broader employment picture looks relatively stable. According to the National Statistics Office, Vietnam's unemployment rate for the first nine months of this year stood at 2.22%, unchanged from the same period last year.

But that figure doesn't tell the whole story.

In the first half of this year, more than 373,000 people applied for unemployment benefits, according to the Ministry of Home Affairs' department of employment. That is over 60,000 people a month quitting jobs covered by unemployment insurance.

But remember, those were just the insured workers.

According to Vietnam Social Security, around 17.6 million people nationwide are currently covered by unemployment insurance, or a third of the employed workforce.

Eligible workers who lose their jobs can get benefits equal to 60% of their average salary for a certain number of months.

For many others, losing a job means having to fend for themselves until they find another source of income.

The question of what remains after losing a job, then, isn't exclusive to engineers at multinational corporations: Someone leaving a restaurant job faces it just as surely as someone walking out of a corporate office.

If unemployment can happen to anyone, what matters is how lasting the damage can be.

Economists Steven Davis and Till von Wachter examined this question using more than 30 years of earnings data from American workers.

Their findings, published in 2011, showed that men who lost their jobs during mass layoffs suffered cumulative earnings losses over the following 20 years equivalent to almost a year and a half of wages. When layoffs occurred during a weak labor market, those losses doubled.

Reading those figures made me realize that preparing for the possibility of unemployment is not pessimism; it is something worth doing well in advance.

What remains after a layoff is whatever knowledge and skills you can take with you.

At my current workplace, I have learned structured working methods and how to operate systems according to industry standards. But I regularly ask myself how much of that knowledge and experience would still be useful if I left for another company.

The distinction between transferable skills and those tied to a particular employer is not always obvious.

In his 1964 book Human Capital, economist Gary Becker distinguished between two types of skills: Those that can be used across different workplaces and those whose value is specific to one company.

A bank employee who knows an internal software system inside out, a store manager who has mastered the procedures of a particular retail chain, or an engineer who is an expert in tools developed by their own corporation may all be indispensable to their current employers. But much of that expertise may carry considerably less weight elsewhere.

Some people might argue that constantly preparing for layoffs shows a lack of loyalty, as though you are always keeping one foot out the door.

I don't see it that way.

Being prepared does not mean wanting to leave. I still do my job as usual. I just feel a little less afraid.

Others might say this advice only works for people whose skills are already in demand.

There is some truth to that. Not everyone starts from the same position. But the fewer options someone has, the more important it is to consider early on what they would have left if they lost their job. Losing work during a weak labor market can double the financial damage, precisely when alternative opportunities are hardest to find.

Workers can build their skills and put aside some savings, but they cannot replace the unemployment insurance system on their own, nor can they decide whether their employer restructures. Those responsibilities belong to policymakers and businesses.

The rest is up to each of us.

And there is a simple test that costs nothing, and that is explaining what you do as though you're sitting in a job interview with another company.

If all you can talk about are the internal software systems and procedures at your current workplace, without being able to explain the broader principles or other skills involved in your profession, it is probably time to learn something new.

It is no reason to panic, however.

Perhaps I will never receive an invitation to an "Important Business Update" meeting.

Nevertheless, I am preparing as if one could arrive tomorrow.