Layoffs

I’ll start this issue of the newsletter off with one of my favorite clips from a fictionalized account of the start of the great recession, which has influenced my life greatly since I graduated college in 2009. You don’t have to watch it, but basically it’s about getting laid off from a place like Goldman Sachs.

I have never been made redundant myself, but I’ve seen waves of layoffs occur at least three times over the last five years since I started working in the chemical industry. Layoffs are different from a “firing,” in that it’s not necessarily the employee’s fault, but rather the blame comes from management or prior management. Layoffs are a way for a company to trim costs and in chemical companies there are primarily two cost centers or areas where people can be let go that I think are of a concern to the readers of this newsletter:

1. Sales, General, and Administrative (SG&A)

2. Research and Development (R&D)

In “Industrial Organic Chemicals” by Witcoff and coworkers within the first chapter the authors outline that the chemical industry is inherently volatile (no pun intended). That the higher salaries (not that high compared to finance, tech, law, or medicine) that are typically garnered in the chemical industry versus academia means that the chemical industry worker needs to save for the day when they are left on their own to pursue other opportunities outside of the company. Typically, the more experience you have the more likely that this becomes true at least from what I’ve seen and if you can make it to an age where you do not need to work for your salary then guess what, you have won.

A former coworker of mine who I really respect found himself at this age much sooner than his managers and he “retired” during the pandemic to live off of his rental property income. He told me that he had been preparing for an economic downturn for the last few years and that he had in total at least two years of all his expenses in cash. This might seem like a lot of cash to hold (especially considering how many mortages he had), but the more I thought about it the more I realized that the older you are the more prudent it is to hold a few years of expenses on hand in the event you get laid off. This is a lot more cash than the 6 months that is typically recommended by most fudicary type people.

Let me explain.

If you are in your mid to late career as an R&D professional and you’ve spent significant time with your current employer there is a high likelihood that you’ll be asked to leave. Hopefully, you get some severance. This is my own anecdotal evidence, but a quick search showed that reporting from ProPublica reinforces my own experiences. From the sub-title of the article: 

A new data analysis by ProPublica and the Urban Institute shows more than half of older U.S. workers are pushed out of longtime jobs before they choose to retire, suffering financial damage that is often irreversible.

Having two years of expenses in cash is a good cushion when you are older and if you lose your job and your severance and unemployment benefits get you through one year, guess what? You still likely have two years of expenses covered provided that inflation is not rampant. There is also a strong likelihood that you get laid off during a recession so having a strong cash cushion is nice for not having to sell investments during a downcycle. If you are in your late fifties or early sixties a few years of cash could mean the difference between when you can draw on retirement accounts and actually being retired.

But what if you are in the middle of your career, like your mid forties? One to two years of expenses could help tide you over to look for your next gig because unlike other professions there just aren’t really a lot of job opportunities out there for chemists and by out there I mean in the world. A “joke” on Chemjobber’s blog is the following:

What's the job market like for chemists? Dude—it's always bad.*

(*For the literal-minded, this is a joke. Mostly.)

Likely if you are mid career then you need to find a new job. One of my previous co-workers had been living and working in Louisville, KY for over ten years after having worked in Conneticut for ten years, then he got laid off. He is one of the best polymer chemists I’ve known and he has the respect of everyone that knows him. It took him over a year to get a new job, which was not in Louisville nor was it in Kentucky. My point is that you lose a job in one place and you might have to completely disrupt the life of you and your family for the next opportunity (unless you’ve got a spouse that can support everyone). 

My other piece of advice would be to live in an area where jobs are abundant for your respective field of chemistry. These places in the United States are primarily Houston, parts of Ohio, the greater Boston area, Chicago, the greater Philadelphia area, and certain parts of California. You do not want to be working for the only company in a small town because once your job or your manufacturing site gets closed down then you have no options except to move somewhere new. 

If you are living in a place where jobs in the chemical industry are abundant then your career could have more resilience unlike the supply chains of most major companies over the last year. I had some coworkers in Texas I met at a conference and they talked about how difficult it was to keep chemists in Houston because of how easy it was to find a better job that paid more money. Losing a job due to a layoff in an area where new jobs are abundant is a good idea. For instance, even though I love the DC/Maryland area and consider it “home” in a lot of ways, it is not a place with abundant jobs for a person of my general skill set (as of right now anyway). 

In closing I want to add that we are also more than our jobs even though many of us find identity and purpose through our professions, especially if you have a PhD. I would advise my fellow chemists in the chemical industry to figure out some awesome hobbies—ideally ones that could be turned into full time gigs if required (newsletters?). Figure out ways to create more resilience in your life because if you stay in the chemical industry long enough I can almost guarantee you’ll “hear the footsteps” of a layoff coming your way eventually. Think about all the chemists who got laid off from DuPont back in the mid-late 2010s when DowDuPont got formed.

I’ll end this much in the same way I started it, with another clip from Margin Call. Once again you don’t have to watch it, but I recommend it. The character who gets laid off in the beginning, played by the amazing Stanley Tucci, talks about how he used to be an engineer. How he used to create things that were of service to people. Replace Stanley Tucci’s bridge in the clip with a polymer or a small molecule of particular interest and you’ve got yourself a chemist ruminating on their past successes after getting laid off. 

Tony