Laid Off vs. Fired: What Are the Differences and How Do They Affect Your Job Search?

Losing a job is always challenging, whether you’re laid off vs. fired. While it’s natural to miss your old job and worry about finances, it’s also important to focus on your future. By getting started on your job search as soon as possible, you can move on and up to bigger and better opportunities. How you do so will depend on the circumstances surrounding your job loss.

In this article, we explain the differences between being laid off vs. fired and provide some tips for how to navigate job loss and job search.

What Does “Laid Off” Mean?

Being laid off means that your position is being eliminated through no fault of your own. This usually means that you won’t be replaced, at least not at the current location (in some circumstances the position may be outsourced, or the company might be moving).

Layoffs often impact more than one person at once, but sometimes only one position is eliminated, like when a project is shut down. These are some common reasons you might have been laid off:

• Loss in revenue: Whether due to a slowing economy, market changes, or company-specific factors, less revenue often results in staff reduction.
• Relocation: A company that’s moving its location, whether nationally or offshore, might lay off much of its local staff.
• Lack of work: If there isn’t enough work to go around, you might get laid off. This can happen when projects are shut down or clients don’t renew contracts.
• Mergers and acquisitions: If your company merges with another or is acquired, the business might be restructured, meaning that employees with similar counterparts at the other company might be made redundant.
• Outsourcing: Some companies cut costs by replacing permanent staff with contractors or employees in other countries.

What Does It Mean to Be Fired?

Being fired means that you’ve lost your job either because your performance didn’t measure up to expectations or you did something that went against company policy. When you’re fired, your role will typically be refilled.

If you were let go before of something you did (or didn’t do), you were most likely fired. These are some common reasons for being fired:

• lackluster performance
• unethical behavior
• illegal behavior
• breaking a rule in an employment contract or HR policy
• lies on the job application that were caught later

What Is Being Furloughed?

A furlough is when an employer asks you to temporarily leave work without pay or reduce your hours and pay due to lack of work or other financial reasons. If you’ve been furloughed, you may be asked not to come to work for a period of time, like three months. If you’re hourly or non-exempt, you can be asked to reduce your hours for a certain period of time, but if you’re exempt, you have to get paid a full salary for each week you work.

Not Sure If You Were Laid Off vs. Fired?

Whether you were laid off vs. fired should have been clear in the conversation where you found out that you were losing your job. If it wasn’t, review any paperwork you received. You’ll need to accurately describe the circumstances of your termination to file for unemployment, and it’s likely that the question will come up during future job interviews as well.

If you’re still not sure, ask your former employer for clarification in writing, or consider consulting with a lawyer, especially if you think you might have been fired. A lawyer can also give you advice on what paperwork to sign if you didn’t sign anything yet.

How Does Being Laid Off vs. Fired Affect Your Finances?

If you were an at-will employee (which most employees are) the employer had great leeway in determining if they should keep you on staff, so why does it matter if you were laid off vs. fired? Well, it might affect your wallet.

You usually can collect benefits if you are unemployed “through no fault of your own,” but each states defines this differently. In most circumstances you can’t collect unemployment if you were fired for “misconduct” like theft of company property, failing a drug test, or committing a crime. If you were fired because you couldn’t perform your job, you are probably still eligible for unemployment.

You’ll often also be ineligible for company benefits after being fired, such as severance pay. Fired workers can qualify for COBRA (continuation of health coverage) unless they were fired for gross misconduct, as long as they meet the other requirements.

You can look for a new job while you’re furloughed unless your employment contact says that you can’t. Your ability to collect unemployment while you’re furloughed will depend on your state’s laws.

How Does Being Laid off vs. Fired Affect Your Job Search?

The second reason is that being laid off vs. fired will affect your job search. If you were fired, you’ll need to be able to explain why you were let go and why the same circumstances wouldn’t happen at the new job. Employers are usually more understanding of a layoff, even though questions might come up in these circumstances as well.

While you don’t have to explain the job termination in your job application, you should have a clear, brief explanation about why you were let go ready for your job interview, where it’s likely to come up. Be upfront, brief, dispassionate, and professional. If you were laid off due to circumstances unrelated to you, such as a department closing down, make sure to mention that.

If you were fired, you don’t have to use that word “fired” when describing your job loss, but be honest if the employer asks for clarification. Don’t be tempted to lie by saying you were laid off instead of fired, or that you were part of a mass layoff when you weren’t. Besides being unethical, it’s likely that the truth will come out. Prospective employers could contact people at your old job even if you didn’t list anyone as a reference, a practice called backdoor reference checking.

How to Move on After a Job Loss

No matter the circumstances of your departure, you can move forward after a job loss. Here’s how to do it:

1. Keep It Professional

It’s normal to feel upset when losing a job. You can vent to your friends. Just don’t vent on social media. This can hamper your job search and cause you to lose valuable references. If you were laid off and want to post an update that you’re job hunting, wait a few days and write a brief, professional statement.

2. Take Time to Review the Paperwork

Being let go can come with a stack of paperwork, such as non-compete or non-disclosure agreements, severance packages, and the terms of your departure. If you haven’t already signed them, make sure to take your time to carefully read everything.

Keep in mind that there are often conditions attached to severance packages, such as non-compete agreements or agreeing not to sue the company.

3. Apply for Unemployment

If you were laid off, it’s likely you qualify for unemployment benefits. If you were fired or furloughed, find out what the rules are in your state. Make sure to comply with the unemployment requirements in your state, such as the number of jobs you need to apply to in a given week.

4. Make Sure You Get What You’re Entitled To

Learn the laws in your state regarding unused vacation days, see if you’re eligible for COBRA, find out what to do with your 401(k) plan, and make sure to stay on top of any other potential benefits, such as stock options and severance pay.

5. Stay in Touch

If you were laid off or otherwise left on good terms, don’t rule out using connections at your past job, including your old supervisor, for references.

6. Focus on the Future

In most cases, it’s best to look forward when losing a job, at least after the initial shock wears off (if you were wrongfully terminated, you can consider other options). Use the circumstances as a reason to evaluate what you want for your future and start your job search as soon as you feel ready to move on.

Move Your Career Forward With Monster

Don’t let the fact that you lost your job get in the way of your career goals. Whether you were laid off vs. fired, you can always start over again at a new job. Sign up with Monster today to upload your resume and start applying to jobs that interest you. We’ll also get your resume to recruiters and hiring managers to help you find the right job sooner.

This article is not intended as a substitute for professional legal advice. Always seek the advice of an attorney regarding any legal questions you may have.