Take steps to prepare for coming job loss

WASHINGTON -- Capital One's ubiquitous advertising campaign -- "What's in your wallet?" -- has taken on a different and jarring meaning for hundreds of workers in its mortgage banking unit.

That's because in the coming months, many employees may have much less going into their wallets from Capital One after the financial services company announced a wave of layoffs last week.

Capital One said it is shutting down the residential mortgage origination operations at its wholesale mortgage banking unit, GreenPoint Mortgage. The closing will result in the loss of 1,900 jobs at GreenPoint's California-based headquarters and at 31 other locations in 19 states.

Capital One joins a growing list of companies that are laying off workers amid the mess in the mortgage industry.

With thousands of people losing their jobs across the country, many are worried what to do next. In a recent online discussion, one such worker wondered how to manage her probable layoff.

The Fort Lauderdale resident wrote: "I am in a really tight spot right now. I am employed with a firm that is having financial trouble. It is likely that my position will be eliminated within the next six months. The job market is really tough out here, and I will have to take a drastic pay cut. Do you have any suggestions for helping me stay afloat until the dust settles?"

When you're faced with a layoff, it's time to do things differently. For example:

•Start cutting your expenses right away. Unless you have another job lined up, you've got to attack your budget like a sushi chef chopping fish. I understand the urge not to disrupt the status quo. But things can turn bad financially quicker than you think.

•If you suspect you may be laid off, this might be the time to line up a home equity line of credit, says Sheryl Garrett, founder of the Garrett Planning Network Inc., a network of fee-only financial advisers. "But this goes with a big warning," Garrett said. "Do not use this unless it is absolutely necessary. Do not spend this money on anything that can be postponed."

•Take advantage of all counseling, career seminars or outplacement assistance. Capital One is offering dislocated workers a lot of job placement help. "Providing resources to help them through the transition and make good choices for their future is a priority," said Judy Pahren, senior vice president in human resources at Capital One.

If your employer isn't offering assistance, go to www.careeronestop.org, which is a U.S. Department of Labor-sponsored Web site that offers career resource information. Click on the link for "People and Places" and then go to "One-Stop Career Centers." From there you'll be able to enter your ZIP code and find a center closest to you. Among many other things, the centers offer help with writing a resume.

"A lot of people don't take advantage of these free resources," said Kim Rhim, executive director of The Training Source Inc., a Maryland-based nonprofit employment training and job placement assistance program.

•Immediately start looking for a job as if the search were your full-time job. And don't be too proud to get a "JOB, as in a 'Just Over Broke' job," says Rhim. "Take a sustainability job." That's the type of employment that will at least pay for the basics -- rent, food, utilities. Rhim recommends accepting a position with evening hours to leave your days free to look for the type of work you really want.

•Stop contributing to your retirement plan. Having a cash reserve trumps retirement planning during this time. Resist thinking that if you run out of money down the road, you can tap your 401(k). That's a costly move. You'll be looking at a penalty of 10 percent for an early withdrawal, plus you have to pay income tax on the money.

•Make minimum payments on your credit cards as soon as you know you're losing your job. Again, you need to save as much cash as possible.

•If you are getting severance money, don't invest it. Full-time associates at Capital One will be eligible for severance based on their tenure. If you are getting a lump sum as part of your layoff, put it in the highest-yielding savings account or money market account you can find. This is money you may need in the short term so it's unwise to risk losing it.

Most of all, "don't panic," Rhim said. "You'll grieve for a while but don't let it be too long."

You can't afford to let fear set in because you've got work to do -- you've got to find a job.

© 2007, The Washington Post Co.