Layoffs announced: EMIs, no salary, no emergency fund

#Layoffs announced. A friend called, anxious and overwhelmed!
He's been with the company for over a decade. But now, he fears he may be on the hit list.
What worried him the most? #EMIs, no active salary, and no #EmergencyFund.
Like many others, over the years, he had invested in multiple properties, but they’re illiquid. With not much buffer, panic was setting in!

I heard him out, and then calmly walked him through a few financial cushions he may have overlooked:
- #Gratuity - After 5 years of service, companies must pay 15 days’ wages, at current salary, for each completed year
- #LeaveEncashment - He had accumulated paid leaves, which will be encashed, adding to his liquidity.
Together, these alone could help him cover 4-5 months of salary, and the best part a large amount would be tax-free! A point to note, most companies for calculation only consider the Basic + DA and not the CTC!

I advised him further:
- Check for #Severance Pay – Often offered during layoffs.
- Check #NoticePeriod Payout – If the layoff is immediate, salary for the notice period is typically paid.
- Slash Non-Essential Expenses – Prioritize cash preservation and buffer liquidity.

Once he did the math, he realized he had close to 10+ months of breathing room.
Finally, I reminded him, the Full & Final Settlement is not immediate; some firms take up to 90 days to process, so plan carefully.

With financial anxiety eased, he’s now focused on what’s next, refreshing his resume and restarting the job hunt.

The lesson?
Even if an emergency fund isn’t in place, there might still be buffers, but not everyone would have stayed in the same firm for a decade!
So, building an Emergency Fund proactively is financially prudent!