When sudden unemployment hits, it helps to have a financial plan in place

Measures include an emergency fund that will cover six to 12 months of total expenses

- Angela Tan

A few years ago, a friend in her early 30s was laid off around the time she found out she was pregnant with her second child.

The news came as a shock as there were no signs that the company had been struggling. Her performance appraisals had also been good since she joined the firm.

Like many young people, she had the impression that only employees in their late 40s and above are targets for layoffs and retrenchments.

Fortunately, my friend could afford the involuntary break as her husband is employed. She found a new job after the baby was born.

Looking back, she said the episode taught her not to take things for granted—notably her finances, especially as a mother of two young children.

The terms "retrenchment" and "layoff" are often used interchangeably, but there are some differences between them.

A layoff is when an employer temporarily terminates the employment of a worker, usually due to a downturn in business or a lack of work. Employees may be rehired when conditions improve. A retrenchment, however, is a form of layoff which involves permanent termination of employment as an organisation restructures or cuts costs.

In 2024, major tech companies such as Meta, TikTok, Dyson, Microsoft and Google collectively cut at least 9,000 jobs in Singapore.

Over the years, sectors such as media, banking, manufacturing and retail too have had major job cuts. This trend may worsen as global economies reel under the US-China trade war.

Roles are also affected by market changes. According to the World Economic Forum's Future of Jobs Report, digital access, cost of living and geopolitical tensions could affect 22 per cent of roles between 2025 and 2030.

Losing our job can cause poor sleep and financial anxieties, especially if there are dependents to feed and bills to pay.