With artificial intelligence rapidly transforming the workplace, concerns over job security are only growing. While AI is creating new opportunities, it is also automating roles across industries, and things are not looking any better in the near future.
Layoffs at Indian IT giant Tata Consultancy Services (TCS) have once again brought the issue into focus. Reports suggest that more than 12,000 job cuts have been approved internally for FY26. What is causing even greater concern, however, is the lack of official communication, with many employees potentially unaware that their roles could be affected.
The uncertainty extends beyond TCS. The global technology sector has witnessed a fresh wave of layoffs in recent months, with companies such as Intel, Microsoft, Google, IBM, Infosys, and several other major firms reducing their workforce. For professionals in India’s IT industry, the developments serve as a reminder of the importance of being financially prepared and having a backup plan in an increasingly unpredictable job market.
The first few days after a layoff can be overwhelming, but one of the most important things you can do is get a clear picture of your finances. Instead of making rushed decisions, sit down and calculate how much money you will need every month to cover essential expenses.
Start by listing all your fixed and necessary commitments, including:
- Children’s education fees
- Home loan EMI
- Car or bike loan EMI
- Credit card dues
- Personal loan EMI
- House rent (if applicable)
- Groceries
- Household expenses
- Electricity bills
- Internet and mobile bills
- Consumer durable EMIs
- Other essential expenses
Once you have the list, separate “must-pay expenses” from those that can be reduced or temporarily paused. For example, you may be able to cut down on fuel costs by using your vehicle less, but loan EMIs and rent cannot be skipped. This exercise will help you understand how long your savings can support you and where you can make adjustments while searching for your next opportunity.
Build A Financial Safety Net
After assessing your expenses, focus on building a financial cushion that can cover at least 6-12 months of essential expenses and EMIs. Gather all available resources, including savings, severance pay, fixed deposits, mutual funds, and other investments, to understand how much support you have.
Keep some money easily accessible in cash or a savings account for immediate needs. Since mutual funds can take a few days to redeem, fixed deposits may offer quicker access to funds. If you don’t have an emergency fund, consider reviewing underperforming investments and non-essential financial products to create a stronger safety net while you search for your next job.
Cut Down On Non-Essential Expenses
One of the first steps after a layoff is to reduce discretionary spending and focus on essentials. This doesn’t mean eliminating all expenses, but finding ways to lower your monthly outgo wherever possible.
“Cut down the discretionary expenses and take a stock of how much savings you have and what is your monthly fixed cost (school fees, EMIs, etc) outgo,” advises Suresh Sadagopan, Founder of Ladder7 Financial Advisories.
Experts also suggest considering options such as moving to a lower-rent home or cutting back on expenses like dining out, subscriptions, and entertainment. Even small changes can help stretch your savings and reduce financial pressure while you search for your next opportunity.
If The Job Search Is Taking Longer Than Expected
If it has been four to six months since your layoff, it’s time to reassess your finances and make tougher cost-cutting decisions. By this stage, a portion of your savings may already have been used, making it important to reduce expenses wherever possible.
Experts suggest considering measures such as shifting to a lower-fee school, cutting down on car or bike usage, and exploring gig-economy opportunities for temporary income. “Gig economy jobs are not a substitute for actual jobs. At best it can be like a band-aid,” says Suresh Sadagopan.
While retirement savings such as the National Pension Scheme (NPS), Public Provident Fund (PPF), and Employee Provident Fund (EPF) can provide support in emergencies, financial planners advise using them only as a last resort. These funds are meant for long-term financial security and should ideally be tapped only for genuine emergencies or to avoid loan defaults.
While no one can completely predict or prevent a layoff, being financially prepared can make the transition far less stressful. Building an emergency fund, cutting unnecessary expenses, and having a clear plan for your savings can help you stay afloat during uncertain times and give you the breathing room needed to focus on finding your next opportunity.