ConAgra announced today that it was cutting 1,500 jobs from its Omaha workforce and that it would move the company headquarters to Chicago. 1,200 workers will remain in Omaha for now, but over time those jobs will probably disappear as well. That giant sucking sound you just heard was about $100 million of payroll leaving the city. And that is just the impact at ground zero. There will be waves of economic consequences rippling through the Omaha community over the next year. This is a big loss for Omaha.
I’ve seen many cycles of corporate layoffs over the past twenty years in Nebraska. There are common themes to these cycles, and now is a good time to share some of the insights we have collected over the years.
Here is what ConAgra employees need to consider right now, especially those who already carry a hefty debt load:
- Retirement Accounts. Do not touch that retirement account. It’s temping to tap into retirement savings when you are between jobs. Bad idea. You think it is a temporary situation and that you will replenish the funds when the new job arrives. Retirement withdrawals come with tax consequences and an extra 10% tax penalty for those who are under age 59 & 1/2. I’ve seen countless people over the years who have burned through hundreds of thousands of savings trying to maintain the mortgage, auto and credit card payments only to wind up in bankruptcy when the account ran dry. Remember this, retirement accounts are protected from creditor claims. Retirement accounts are protected in bankruptcy and outside of bankruptcy. Keep the money in the retirement account.
- Downsize Now. Some ConAgra workers will find comparable jobs quickly, but most won’t. Fortune 500 jobs don’t come around every day. Take a close look at your monthly housing and auto expenses and ask yourself this question: If your income drops by 50% can you still keep the home and car? Start living the new normal today. Consider selling the home and trading in for a cheaper car now.
- Be Prepared to Earn Less. You’ve got years of experience. You wrote the book on how things get done. You are not going to compromise and accept a demeaning job working with people half your age for half of what you were earning before. Think again. If you are a middle aged worker you will face a lot of age discrimination in seeking a new job. Younger managers feel threatened and uncomfortable with hiring older, smarter, more-experienced employees. Waiting for the right job to come along is a mistake. The longer you go without being employed the worse it looks. Employers shy away from hiring people with long gaps in their employment history. Be willing to take a lower paying job now to maintain a continuous employment history. You can always upgrade jobs later.
- Be Willing to Move. Omaha now has 4 Fortune 500 companies left, and one of them, Union Pacific Railroad, has been eliminating jobs recently as well. Chances are you will need to be willing to move to another state to find a similar job.
- Stay Fit. With layoffs come depression. The tendency is to hole up and watch movies, eat donuts, etc. Start moving. Set specific goals and consider getting a trainer to reach them. You are used to structure in your daily life. That is a good habit to maintain.
- Network. This should be obvious. Take every opportunity to communicate with the people in your life. Press the flesh. Do lunch, chat with Facebook friends, update the LinkedIn profile.
- Volunteer. It is important to stay working. Helping others always leads to better things and it offers a chance to network. You have vital skills that will benefit others and it keeps you mentally alert and fills in gaps in the resume.
- Add up the Debts. Now is the time to make an inventory of every debt you owe. How bad is it?
- Consult with a Debt Professional. I can’t tell you how many people I meet that I could have steered away from bankruptcy had they only talked with me sooner. If a debt problem already existed before the layoff it is time to meet with a professional in debt management. Maybe it is time to clear the debts in bankruptcy while your income is low. Perhaps you did not qualify for bankruptcy because of your high-paying job at ConAgra, but now you have options. Maybe debt settlement is a better option if a large severance package is coming your way. You have options. Talk with a professional about what option is best.
Well, congratulations to Chicago for taking our beloved ConAgra away from Omaha. Hey Governor Ricketts, since your family owns the Chicago Cubs, can you move them to Omaha? Just a thought.
What is your advice to ConAgra employees? Let’s hear it.
Image courtesy of Flickr and Ali Eminov.