The Hidden Trauma of Layoffs That's Affecting Us All

But that doesn’t mean your emotional experience these last few months isn’t real.

Mental health speak is more common these days. That’s a good thing, it means we’re finally talking about our emotional worlds and normalizing that everyone has mental health, just like physical health.

Sometimes we’re thriving. Other times, we need a tune-up.

But as mental health language enters everyday conversations, it sometimes gets used imprecisely. That can lead to misunderstanding, overpathologizing, or even unintentionally invalidating others.

I’m Dr. Huong Diep, and I’ve written about how to support folks after unemployment and unemployment grief. Today, let’s talk about trauma.

Or skip ahead to the bottom! We have two opportunities for post-traumatic growth this week!

Types of Trauma

Let’s start with some basics about trauma and how it can show up around layoffs.

The word “trauma” comes from the Greek word for wound. Traumatic events are experiences outside of our control that can cause emotional, physical, spiritual, or psychological harm.

You don’t need to be in a war zone or a car crash for something to be traumatic. What matters is your nervous system’s response; how your body reacts when it doesn’t feel safe, seen, or supported.

Psychological trauma refers to the emotional distress that results when an experience overwhelms our ability to process it. Think of it like this: external events + our body’s reaction to them = whether something becomes traumatic for us personally.

In psychology, we sometimes talk about different types of trauma that all humans experience:

• Acute trauma comes from a single overwhelming traumatic event, like a sudden job loss, car accident, or natural disaster.

• Chronic trauma stems from prolonged exposure to stress, such as workplace bullying, financial instability, or a toxic environment over time.

• Complex trauma often involves repeated, interpersonal harm, like emotional abuse or neglect, usually beginning in childhood.

Unfortunately, if you’ve experienced childhood trauma, things like poverty, emotional neglect, or unsafe environments, those earlier wounds can affect how you respond to stress today.

Different Trauma Levels

I’m sure you’ve seen this. Two people can go through the same event and walk away with very different reactions.

For example, after surviving a plane crash, one person might say, “I am never getting on a plane ever again!” whereas another person might say, “Wow, I’m so lucky. I need to keep traveling and doing what I love.”

That’s not a measure of strength or weakness. That’s about individual wiring, life experience, and the resources we have to support us.

During a tough time in grad school (where I was being tougher on myself), a wise supervisor once told me, “Huong, you’re having a normal reaction to an abnormal event.” That stuck with me.

And yet so often, I hear clients shame themselves with all the “shoulds”, I should be over this by now. I shouldn’t be so anxious. I should be applying to more jobs. That self-talk only adds another layer of pain.

Layoff Trauma is Real

Layoff trauma, sometimes mislabeled as PTSD, is both an important and misunderstood topic. Layoffs can absolutely be traumatic.

Losing your job can also mean losing your sense of purpose, your daily structure, your financial stability, and your professional identity. Sometimes, it even means losing a community you’ve built over years.

What makes traumatic events even more complicated is that each of us has a unique nervous system response when something feels threatening, sudden, or deeply disruptive. That’s another reason why some layoffs can feel even more destabilizing.

You might not just be reacting to the present-day event, but to a pattern your nervous system has seen before.

For example, I have a client who grew up in poverty and with food instability. These early experiences have shaped his views of money and security and fueled his desire for a “stable” career due to a “scarcity” mindset.

Therefore, despite having some money saved, he is highly anxious during this period of unemployment with nagging fears of “What if I can’t take care of my family?”

Working together, I was able to help him connect the current stressors of unemployment and his old trauma wounds of growing up with neglect and vowing to do things differently. With that understanding, he was able to begin to self-regulate and make decisions from his prefrontal cortex (thinking brain) rather than his amygdala (survival brain).

Layoff Trauma is Not PTSD

So, where does “layoff PTSD” fit in?

Technically, it doesn’t. PTSD, Post-Traumatic Stress Disorder is a clinical diagnosis in the DSM-V. It requires specific symptoms that last more than a month and impair daily functioning across several areas.

This diagnosis should only be given by a licensed mental health or medical provider after a thorough evaluation and at this time, PTSD does not include “layoff PTSD.”

But that doesn’t mean what you’re feeling isn’t valid, especially if you're experiencing symptoms like:

• Sadness (low mood for some, but also can be masked as anger for others),

• Fear (“What if I never find a job?”) ,

• Hypervigilance (scanning LinkedIn and job sites at all hours of the night, jumping at every notification),

• Nightmares (particularly related to work and Friday bad news emails),

• Irritability (feeling on edge and not yourself) ,

• Emotional flooding (too many emotions coming in at once, which might lead to numbing as a coping tool),

• Avoidance (not engaging in activities you once enjoyed),

• Shame (“What’s wrong with me that I don’t have a job yet? My colleagues are getting hired. There must be something wrong with me”),

• Memory issues (chronic stress negatively impacts memory),

• Difficulty concentrating, or disrupted sleep among others.

Sometimes a layoff triggers Adjustment Disorder, which is actually pretty common. This is a short-term condition where someone has difficulty coping with a major life change. You might feel anxious, sad, easily overwhelmed, or even irritable.

It usually resolves with time and support. Some examples can include: graduating high school and going to college, getting married, and moving to a new country.

In other cases, someone may experience Acute Stress Disorder, which can include panic (intense form of anxiety which can include physiological arousal), dissociation (a sense of being outside your body), and severe hypervigilance (always on guard) shortly after a traumatic event.

And yes, for a smaller group of people, especially those with a trauma history, a layoff can contribute to developing symptoms of PTSD or a full diagnosis.

According to the World Health Organization, over 70 percent of adults worldwide have experienced at least one traumatic event, but only a minority (about 5.6%) will develop clinical PTSD.

Layoff Trauma is Normal

So what can you say instead?

You can say the layoff felt traumatic. That it shook you. That it triggered fear, insomnia, stress, stomach issues, irritability, or a fear of applying to jobs again. None of that means you’re broken. It just means your nervous system is doing its job, maybe a little too well right now.

Layoff trauma can also impact your decision-making, your self-confidence, and your motivation to re-engage with the professional world. If you’re feeling confused, indecisive, or paralyzed, that doesn’t mean you’re lazy or unmotivated. It might mean your body is still trying to make sense of what happened.

If these symptoms are interfering with your ability to function at home, in your relationships, or in your job search, I encourage you to speak with a mental health professional. You don’t need a diagnosis to deserve support.

And here’s something that gave me hope when I read about it years ago.

Not everyone who experiences trauma develops PTSD. In fact, many people go on to experience post-traumatic growth, a deeper sense of purpose, stronger values, or greater empathy.

That’s different from the outdated idea of “resilience” that tells you to bounce back fast and smile through the pain. Post-traumatic growth acknowledges the loss and the learning. It says, this changed me, and I’m still here.

So if your layoff cracked something open, you are not alone. And you are not broken. You are human and having a very normal reaction to a VERY abnormal event.

Two Ways for Post-Traumatic Growth

We aim to help you move through layoff trauma with two special events this week. Building a self-care plan with Vik Kapoor and processing layoff trauma with Dr. Anne Justus.

Thursday 11AM: Building a Self-Care Plan

On June 19th, Vik Kapoor is hosting a one-hour workshop for you to build your own written self-care plan.

Vik in his own practice has walked over 8,000 people through their self-care plan, including UN diplomats. On Juneteenth, he’ll help you reduce self-sabotage and self-abuse by getting analytical about our self-care.

Use the promo code CAREERPIVOT for a special discount. Paid Career Pivot subscribers can join for free (see Sunday night’s email).

Wednesday Noon: Processing Layoff Trauma

Dr. Anne Justus will join us again, this time discussing layoff trauma and how it may follow you into your new job. She’ll talk through the symptoms and what you can do about it.

Paid Career Pivot Subscribers can RSVP at the link below.