Wednesday, October 30, 2013

The Layoff Project: "Realize you are not alone."

Our most recent Layoff Project submission is from LT, who is unusual, in that it is her spouse (not her) that has been laid off from positions in pharma. This submission was lightly edited and redacted by CJ and checked for accuracy by LT. She is a tenured professor of chemistry.

I felt LT's comments were noteworthy because she said that she guided her family through 3 layoffs without touching savings, a real achievement. Today is going to be her experiences with the layoffs, while tomorrow will focus on her financial tips for surviving it.

CJ: Can you talk a little bit about your experience?

LT: We’ve been through three layoffs. The first one was at a “big pharma,” the second was at a biotech and the third was at a contract research organization. They’ve spanned a 14 year period, so we’ve been at very different stages as a family and the circumstances surrounding each were quite different as well.

The first time we found ourselves unemployed, we had two small children (preschool and elementary school) and I wasn’t working. Both my husband and I have PhD’s so we had the typical “two-body” problem finding jobs. I opted to take some time with our children when he landed the big pharma job. I did work for a while during those few years, but between my commute and daycare for two children, financially, I was making about what I did as a TA in grad school, so I decided to step away from my visiting assistant professor gig to devote time to our children.

His employer announced that the company was going to be purchased by another company. Not knowing how everything worked in those circumstances, he assumed everything would be ok, since at one of their meetings, upper management said they’d be “shocked” if massive layoffs occurred. Well, a few months later he was out of work, along with lots of other folks!

BUT, he received a good severance and a bonus for staying on during the takeover. The company offered outsourcing services that he took advantage of. He was employed within four months and moved away to start his new position. I held down the fort for a couple of months so our oldest could finish school, took care of selling the house, and moved the two kids and I to our new home several hundred miles away. I took some time to get us settled, but I was determined to get a job because it didn’t seem fair for him to have the burden of supporting our family alone.

The second time unemployment hit, my husband was working for a small biotech company. He went into work after the Christmas holiday and was told he was out of work--no severance, no nothing. This happened in [early] 2009. The economy couldn’t have been worse. The one good thing in all of this was that I was employed at [redacted] on the tenure track. I had health insurance. Our kids were now in middle and high school. It took a full year for my husband to find a job. Unfortunately, the job was on the [redacted] coast, and my job was on the [redacted] coast. For over three years, we lived with 3,000 miles between us. My husband did not get a great feeling that his new employer was going to provide a stable work situation. We didn’t want to sell our house at a loss, move across the country, have me lose a fairly reliable job (I wasn’t tenured at the time) and end up with both of us unemployed and away from our families.

The third layoff happened in April of this year, so his intuition served us well. The severance was minimal (less than a month of pay.) Most of it went to moving expenses to bring him home. He was given a limited number of hours to work with a resume writer, which was helpful. We now have one child in college and one in high school. I am pleased to say that he will be starting a new job soon, within commuting distance of our home.

CJ:  What would you recommend to people new to the situation? What would you recommend that they NOT do?

LT:  Realize you are not alone. Being a scientist in industry, especially the pharmaceutical sector, is a cruel profession.

What should you do?
  • Apply for unemployment as soon as you can.
  • Look at your monthly bills and quickly eliminate anything that is not necessary.
  • If your children are old enough to understand, tell them what’s happening.
  • If your spouse or partner has health insurance, make sure everyone is covered under that policy. COBRA is too expensive!
  • During the 2009 stretch of unemployment, I lowered my monthly 401K contributions and I changed my state and federal withholding. I wanted to maximize my monthly paycheck.
What should you NOT do?
  • Pretend that nothing has changed or try to hide what’s happened at work from your children and extended family. 
CJ here again. Thanks to LT for her story and best wishes to all of us. Tomorrow, more financial tips on how to survive a layoff.

The Layoff Project is an attempt to collect the oral histories of chemists who have been affected by the changes in the pharmaceutical and chemical industries. The explanatory post is here; stories can be left in the comments or e-mailed to chemjobber -at- gmail/dot/com. Confidentiality and anonymity is guaranteed. 

23 comments:

  1. This illustrates how for many people, jobs in a different state, or even in the same one, are not a real option. That's why it's good that some biotechs are going bust (like Seattle) and things are all concentrating in Boston. This does of course, question the need for a good training program at the University of Washington, but whatever. Then, if you get fired from one place, it's possible to stay in the same city. The alternative is to move to a city state like Singapore or Hong-Kong. Also, I suppose some countries are small enough where a commute on the train for an hour or two won't be a problem. And Tokyo and Seoul would count as city states due to large concentration and good transportation.

    Or, if we're lucky enough, companies will start treating workers with respect and will reward loyalty and invest in training, but it's probably not going to happen in my lifetime.

    ReplyDelete
  2. "companies will start treating workers with respect and will reward loyalty and invest in training"

    The ones that provide hitching posts for unicorns do.

    Lack of corporate loyalty to employees is a function of lack of investor loyalty to companies. Guess who the investors are? Pretty much every employee with a 401k or IRA or pension (about as common as unicorns these days).

    People want millworkers in the South to have jobs, but also want to get tube socks at 6 for $3.99....We get the corporate culture we ask for.

    ReplyDelete
    Replies
    1. "Pretty much every employee with a 401k or IRA or pension (about as common as unicorns these days)."

      Agreed.

      Delete
    2. Good point. I want to see good jobs for chemists in Pharma but I get pissed off that US Medicare cannot negotiate drug prices, like other countries do.

      Delete
    3. "I get pissed off that US Medicare cannot negotiate drug prices, like other countries do"

      Which I also think is shameful, but was enacted by the very politicians we elected and will continue to elect....

      Delete
    4. Well, IMO, it also had to do with the pharma lobby buying off (through campaign contributions) the appropriate legislators, like the sleaze bag Billy Tauzin who got a huge pay off when he became head of PhRMA for 2 million dollars:.

      http://sunlightfoundation.com/blog/2010/02/12/the-legacy-of-billy-tauzin-the-white-house-phrma-deal/

      Delete
    5. True, but it was congress who passed the legislation, not lobbyists.

      Just like we complain about corporations but continue to hold stock in them, congress has a near baseline approval rating and yet >85% of incumbents are continually reelected.

      If you don't like what MRK or BMY is doing, make sure your 401k doesn't invest in them----you have that choice.

      Delete
    6. Not if you're in the index funds, you can't.

      Delete
    7. You don't have to be in index funds.

      Delete
    8. me phailing english is unpossible: making sure none of your 401k/IRA is in index funds, less so....

      Though I acknowledge maybe inconvenient.

      Delete
  3. " at one of their meetings, upper management said they’d be “shocked” if massive layoffs occurred"

    Having been told something similiar, I have always wondered if "upper management" was stupid or deceptive.

    ReplyDelete
  4. @uncle sam:

    While concentrating companies in one region is convenient for workers, it causes intellectual inbreeding. Intellectual inbreeding never works out. Short run is good but in a few iterations you have flipper fin hand waving science.

    ReplyDelete
    Replies
    1. Concrete examples? A big enough population area has plenty of different universities and companies. For example Tokyo or Boston. Israel is also a small country but there are enough different universities and viewpoints that inbreeding is not a problem. They've recently won a few Nobel prizes in chemistry.

      Delete
  5. I suspect that people have little control over what their pension funds or IRAs do - unless they're doing all the trading, their don't control the portfolio (though they probably could choose portfolios with a different timeframe), and even for long-term stockholders, they probably have little control over what the company does (they have some, because they have shares, but little, because common shares might not have voting power or the votes might be diluted out by preferred stocks or other means).

    I think the short-term mentality in investing is driven more by the large number of people who are about to retire, hoping for enough to retire on, and not caring much about after, and perhaps for the people ten years behind who took it in the shorts in 2008, are unlikely to have a pension (probability close to 0) and will get eaten alive by health care, and probably can't count on Social Security, either. It'll probably end about when the economy craters.

    Buying stuff at cheaper places is probably a more proximate cause.For me, the combination of significantly higher prices (20-30% on average) and less convenience (Kroger closes earlier and has no cashiers after 9 pm - the nearer one to work has almost no cashiers at any time) is a showstopper - ultimately, I'm not willing to pay directly forr a combination of someone else's money and employee well-being. Unless the community is small enough or tight enough (where we're all in the same pot, and lots of my well-being depends on yours) or I (and others) am willing to accept less good or more pain for others, I'm not sure how that balance is going to change.

    ReplyDelete
    Replies
    1. I doubt it's the funds and people's retirements driving this. I would argue it's the brokers who make money on transactions and not necessarily building worth. It's companies like Goldman Sachs playing both sides of the field.

      Delete
    2. But they've always been able (and planning) to make money that way. If my perceptions of market short-term thinking are selective, then it's possible that that's all it is. If the market has gotten more short-term in its thinking (and it seems like pharma, for example, has) then increasing churn by investment bankers doesn't fit the behavior so well, unless the investment banks have bought or were given more control of companies over time for reasons other than short-term gains.

      Delete
  6. Excellent post. Three times in 14 years is probably less frequent than the norm?
    I look forward to LT's suggestions on managing the finances.

    ReplyDelete
  7. I have been laid off twice in my career and have not had to move.

    The first layoff was after 14 years from major chemical company's biotech division... They were getting ready to sell the division and half my department got let go...

    But I got a good severance package (which included out placement and a year of healthcare). That packagem along with with banked vacation time, came to about 9 months of pay...I found a job at a local pharam startup after 4 months, at close to my previous salary, so it worked out OK that time...

    But almost 14 years later, after an adverse FDA decision, I, along with just about everyone else in the company, got laid off... that was the early spring of 2009 at the very bottom of the recession.

    Tat time I had 6 months of severance and a spouse working - though making very little, but with insurance. So while i was nervous, I was not panicking... I should have been... my spouse got laid off 3 months later... and I was out work for 1.5 years!!!!

    Even so we did not have to go into savings... I used my severance to finish paying off the house and we brutally cut expenses (including keeping the heat in the house insanely low)... that combined with the THEN Cobra subsidy and extended unemployment benefits, kept us from losing our savings...

    Considering salary and benefits, my starting salary at the new employer was about 15% less than what I had been making, but given the economy I was glad I found something... I am well aware that next time could be the end of my career, given the times and my age now. That has me very worried as I can't financially afford to retire anytime soon.

    ReplyDelete
    Replies
    1. Anon, I would love to take your story as an official entry, if you'd like. Please e-mail me at chemjobber -at- gmail/dot/com. Confidentiality guaranteed.

      Delete
    2. LT here. We've panicked each time the layoff hit, which ended up being a good thing. I don't understand the folk who say "oh I waited a few weeks to start looking for a job, and didn't change anything about our lifestyle." For us, the experience has gotten progressively harder to deal with because of the lousy severance packages and getting a job gets harder as you age up.

      Anon, I forgot about how cold we kept the house in the winter, and how warm in the summer, but we cut our budget everywhere we could too.

      We never had enough money in a severance to pay off the house, so you're really lucky on that one. The extensions on unemployment benefits in 2009 allowed us just to keep our house. We submitted paperwork at least twice to our mortgage company to see if we could get one of those emergency mortgage modifications. We didn't have a bad interest rate, but if we could have lowered the payment, just a little, it really would have helped up through some lean times. We never heard back from the mortgage company, except when they told us we needed to send in more paperwork. Our goal right now, with this new job, is to pay down our mortgage!!! We couldn't afford extra on our house payment while we were paying for an expensive, yet awful, one bedroom apartment and plane tickets from one coast to the other each month.

      This past layoff was really scary because we ran out of benefits this month, and would have been applying for an emergency extension if the job offer hadn't come through. You don't know how thankful we are.

      I also forgot to mention, the bicoastal experience was also a cut in pay and a title cut. The one lucky thing in all of it is that the state that paid unemployment to us this time was way more generous than the state where my husband returned to.

      Delete
  8. Upper managements is neither deceiving nor stupid. Most of the time they are keep in the dark of the really important decisions. Pharma business continue to be highly pyramidal schemes despite the recent consulting-driven approaches to make organizations flatter. Just my two cents.

    ReplyDelete
  9. I have never been laid off before coming to North America, actually I had never heard the term lay off when I was working in my home country and other Asian country. When I got first lay off along with thousands of co-worker from one of biggest generic company of this region, my heart broke. I never thought that I could be in such situation in my life. Anyhow, I had convinced myself, then studied further and updated knowledge in other areas of pharmaceutical sector with a hope that something can change. But in recession affected country and where owner of these companies have nicely tasted fruit of globalization, I never achieved what I wanted. Somehow I got job in an internationally renowned contract lab, but there too after few years, I got lay off. And actually it was sabotage to my career and life, as so many people were insecure about their own situation in that company, and so I become the victim and target of their feeling of insecurity. These people behaviour were like bully and at the end they gave me lay off saying no work is there, notifying me on same day, now at this mid-age when I got lay off, I am not sure where to go. My wife is trying to earn money, doing night shift and I am looking for suitable employment. This situation in North America rendered me helpless. I had lots of accomplishment in past, I was more confident but this consistent lay off in this country, completely disheartened me. I have lots of debt. I do not know what will be my future.I am trying hard to come out of this situation. Only I can say Globalization is curse for employee of North America.

    ReplyDelete