Corporate layoffs have a strange way of becoming serious only when the calendar invite has your name on it.

Before then, there are explanations. That division was bloated. Those jobs were duplicated. Your team is important. Leadership says the restructuring is “largely complete,” a phrase with roughly the same legal force as “this meeting should only take fifteen minutes.”

That reaction is human. A University College London study led by psychologist Tali Sharot found that people update their expectations more when new information suggests the future will be better than they thought than when it suggests things may be worse. A 2025 Scientific Reports study found a workplace version of the same instinct: 59% of participants expected AI to affect other people’s jobs more than their own.

AI is not a layoff, but the mental move is familiar: the threat is real; somehow we are standing in the unusually safe part of it.

A Brookings analysis followed workers who involuntarily lost full-time jobs they had held for at least two years. Ten years later, they were still earning about 25% less than comparable workers who had not been displaced, and their pay rates remained nearly 15% lower.

So the cost is not simply a few missing paychecks. A layoff can change what the market pays you after you are working again.

Part of the reason is that some of your value belongs to the specific combination of you and your current employer. You know the systems nobody documented, the customer who needs a phone call instead of another deck, and what “we tried that three years ago” means without requiring the archaeological excavation.

An American Economic Review study found that losing this kind of employee-company fit explained more than half of the decline in pay after displacement. A new company may value you; it just may not pay for every advantage that years inside the old company made unusually valuable.

Then unemployment adds pressure. A different 2025 study from the American Economic Association found that displaced workers who moved directly into another job had no lasting earnings loss on average, while longer periods without work were tied to much larger, persistent losses. The pattern also appeared beyond layoffs, making “the best workers just get hired faster” an incomplete explanation.

The human mechanism is easy to imagine. The longer you go without income, the less entertaining it becomes to reject an offer that pays $20,000 below your old salary. Eventually “I know what I’m worth” has to negotiate with “the mortgage is due Thursday.”

Put those pieces together and layoffs elsewhere in your company start looking different. They may not mean you are next. They may be something almost as useful: advance notice that the odds have changed.

A Quarterly Journal of Economics study found that each additional month of notice before a layoff increased pay in the next job by about 1.7% and reduced time without work by roughly 0.6 months. The study points to a simple advantage: searching while you still have a job can work better than starting after the paycheck disappears.