With clear positioning, smart client strategies and the ability to monetize existing skills quickly, a career disruption can become the start of a more sustainable business.
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Key Takeaways
- The freelance workforce has expanded substantially, with over one-third of the U.S. workforce now freelancing.
- Layoffs, while emotionally challenging, are increasingly becoming the catalyst for professionals to transition to freelancing — a realm offering more control and flexibility.
- While freelancing poses its own challenges, such as unclear positioning and isolation, treating it as a business from the start can forge a sustainable and rewarding career.
Layoffs are rarely just about losing a paycheck. They can feel like a loss of identity, routine and stability, and for many professionals, they trigger a period of shock, grief or even anger.
But here’s the other side of the story: Layoffs have also become one of the biggest gateways into freelancing. What looks like a career setback often turns into an opportunity to build a more flexible, self-directed path.
I know this firsthand. When I was suddenly laid off, I felt blindsided. But that experience pushed me to try freelancing, and 13 years later, it’s become the foundation of a business I never could have imagined at the time. In fact, when I was laid off again in 2024, this time from a high-paying remote role, I turned back to freelancing full-time and scaled my business back up.
While it’s certainly true that freelancing carries its own stability risks, the experience of losing my source of income in 2024 taught me that I’d rather be in control of creating my own paycheck. It took me seven months to rebuild my business after that layoff and in many cases, I kicked myself throughout that for “trusting” that full-time role.
So why do layoffs so often lead to freelancing? And what can professionals do to make the transition sustainable?
The rise of the “layoff entrepreneur”
The numbers tell the story. In the past five years, U.S. companies, particularly in tech and startups, have carried out multiple rounds of mass layoffs. At the same time, the freelance workforce has surged, now making up over a third of the American workforce. While tech obviously has lots of pathways into freelancing, it’s not the only sector from which people can make a pivot into freelance work.
That’s not a coincidence. When people are laid off, freelancing is often the most accessible next step. It doesn’t require waiting months for job applications, interviews, and rejections. Instead, it allows you to immediately monetize the skills you already have.
And while many start freelancing as a stopgap, a growing number find it offers more income security than a traditional job. After all, if you lose one client, you don’t lose your entire income stream, which is a major psychological shift after the experience of being laid off.
The emotional pivot: From shock to ownership
Layoffs are emotional. Online communities like Reddit are filled with stories of professionals who describe feeling embarrassed, lost or angry after being let go. Many also mention how difficult it is to navigate unemployment benefits or re-enter the job market. In fact, 73% of professionals say layoffs have made freelance work more appealing, while 64% have lost trust in traditional full-time roles, according to A.Team’s 2024 survey.
But here’s the turning point: freelancing allows you to regain a sense of agency. Instead of waiting for someone else’s HR department to decide your future, you get to choose who you work with, what projects you take on and how you structure your day.
That shift from “something was done to me” to “I get to decide” is one of the most powerful mindset changes freelancers experience after a layoff.
Why freelancing works after a layoff
Freelancing isn’t just a backup plan. It actually fits the moment in three key ways:
- Speed. You can start immediately by reaching out to your network, setting up a profile or pitching projects.
- Flexibility. Unlike a traditional job search, freelancing lets you test different industries, project types and clients until you find what clicks.
- Skill alignment. Layoffs often happen for financial reasons, not because of performance. Freelancing lets you continue using the skills you’ve built — while proving your value directly in the market.
Common challenges new freelancers face
Of course, freelancing isn’t a magic cure-all. New freelancers often hit roadblocks such as:
- Unclear positioning. They struggle to explain what they do and who they help.
- Underpricing. Out of fear of rejection, they take on low-paying work.
- Isolation. After years of a steady workplace routine, working alone can feel destabilizing.
- Business basics. From taxes to contracts, freelancers suddenly wear all the hats.
These challenges are real, but they’re also solvable. The key is to treat freelancing as a business from day one, not just a temporary hustle.
How to turn a layoff into a freelance career
If you’ve recently been laid off and are considering freelancing, here’s a framework to get started:
- Take stock of your skills. List out the projects, tools and strengths you used in your last role. These are your first freelance services.
- Define your offer. Create a clear, specific way to package your skills. For example: “I help startups streamline their HR processes with better onboarding documentation.”
- Leverage your network. Send personal notes to former colleagues, managers or clients. Let them know you’re available for project-based work.
- Start small, build systems. Take on initial projects, but use them to create templates, contracts and processes that make future work easier.
- Balance income and exploration. Use early freelancing to generate income, but also experiment with what types of projects you enjoy most.
From laid off to lift-off
I often tell freelancers this: The scariest moment can become the most liberating.
A layoff is a shock, yes. But it’s also a reset button. It forces you to ask: What do I really want from my work? How can I design a career that protects me from this kind of instability in the future?
For me, freelancing wasn’t just a way to replace my paycheck. It became a way to build a career with flexibility, autonomy and resilience. And for many professionals facing layoffs today, freelancing offers the same opportunity. What begins as a setback can become the start of something far more sustainable.
Final word: If you’ve been laid off, freelancing may feel like a leap into the unknown. But it’s also a chance to turn your skills into your safety net, and maybe even into the business you were meant to build.
Key Takeaways
- The freelance workforce has expanded substantially, with over one-third of the U.S. workforce now freelancing.
- Layoffs, while emotionally challenging, are increasingly becoming the catalyst for professionals to transition to freelancing — a realm offering more control and flexibility.
- While freelancing poses its own challenges, such as unclear positioning and isolation, treating it as a business from the start can forge a sustainable and rewarding career.
Layoffs are rarely just about losing a paycheck. They can feel like a loss of identity, routine and stability, and for many professionals, they trigger a period of shock, grief or even anger.
But here’s the other side of the story: Layoffs have also become one of the biggest gateways into freelancing. What looks like a career setback often turns into an opportunity to build a more flexible, self-directed path.
I know this firsthand. When I was suddenly laid off, I felt blindsided. But that experience pushed me to try freelancing, and 13 years later, it’s become the foundation of a business I never could have imagined at the time. In fact, when I was laid off again in 2024, this time from a high-paying remote role, I turned back to freelancing full-time and scaled my business back up.
