Q. We’ve just learned that our company will downsize for economic reasons. We know some of us will be laid off, and we’re devastated. What can we do, and how can we handle the work environment until it actually happens? —Frank T.

A. I’m sorry you’re now experiencing what’s been happening everywhere. You’ve actually begun the process of grieving for your loss, and you can also expect to experience other feelings that are a part of any grieving: denial, anger, bargaining, depression and, finally, acceptance. It’s important to realize that your grief is every bit as serious as facing the death of someone you love, or the end of a marriage.

It’s Over.

Losing a job is hard to accept. But once the downsizing announcement was made, the working world you knew changed, and it won’t be the same again. You and your co-workers must adapt to the new situation; that’s what healthy people do to survive the difficult changes in their lives.

Ann Humphries, president of business-manners consultants ETICON, Inc., (www.eticon.com) has been featured in the Wall Street Journal, FORTUNE, and Money; and on CNN, CBS and Lifetime TV. She recently provided CNN some basic rules-of- thumb on how to handle a layoff or downsizing:

1. Work hard right up to the time you leave.

Announcing or posting a countdown (31 days…30…29…) is a morale-killer, and shows negative thinking. Don't do it.

2. Don't waste time

with agonizing “goodbyes” with co-workers or criticizing the company. Bad-mouthing the place you might have to leave just doesn't look good and it’s unprofessional. You're running down yourself, not the company.

3. Sharing your collective feelings

can be helpful if it's restricted to a special session in your work group. But separate what's only for private conversation and what's for public expression.

4. Leave everything in inheritable condition,

once you know for sure that you’re going. Clean up your mess.

5. Alert your customers and/or clients

so they know you're leaving. Introduce your replacement if you can. Assure co-workers and clients that their needs will be adequately taken care of.

6. Honor all agreements,

such as a non-compete clause. Don't take proprietary information with you. And keep confidential information confidential.

7. Don’t conduct a public job search.

Don't leave your resume in the copier. Don't say, "I can get a job anywhere else -- why do I need to work here?"

Suggest Other Options

It’s possible that management may have missed some other options. For example, you might politely suggest to management that the company could save money other ways:

• Reduce the workweek to 35, 30 or 25 hours.

• Eliminate all overtime and travel.

• Loan out employees to other divisions or non-competing companies to

share salary costs.

• Require everyone to take unpaid vacation.

• Hire employees back as contractors to save money on benefits.

Plan Your Future

There may also be other actions you can take to protect your future: Reporter Ann Fisher in FORTUNE magazine suggests you consider:

Severance pay.

No law requires any employer to offer severance pay (unless your employment contract or union agreement says otherwise). But a good rule of thumb is

two weeks' pay for each year of service. However, if you're over 50 and making more than $100,000 a year, ask for more.

Short-term "stay-on."

Working on a critical project for the company? Suggest you stay on until the project is done. You may even be able to get a bonus to stay during the transition--plus full severance pay.

Outplacement.

Many employers provide outplacement services that include temporary use of office space and career counseling, even one-on-one coaching.

Medical insurance.

By law your employer must offer you COBRA coverage for 18 months; this lets you pay the same premium for health insurance that you’ve been paying, and is usually much lower than what you'd have to pay on your own.

Vacation pay.

Do you have accrued vacation time? Make sure they calculate the value of all the fun you didn't have—last year as well as this year.

Bridging to retirement.

If you're vested and within five years of being eligible, you can ask to be bridged (be vested early) and don't be too quick to take no for an answer. It doesn't cost the company much to bridge you.

Stock options.

You usually have 90 days after your layoff to exercise vested options before losing them. If you push, though, most companies will agree to extend that period to as much as a year.

Read before you sign.

If you're asked to sign anything that sounds like an agreement, such as a waiver of your right to sue the company after you leave, consult a lawyer first.

Financial Future: Manage Yours

I’m worried about my future financial security. From what I read and hear, I can’t count on my company taking care of my retirement. I’m not sure I can count on stock brokers, because I don’t know how to select one I can trust. What do you suggest? Amy G.

You’re right to be concerned, and you’re not alone. I’m not a financial analyst, but I’ve learned enough to make what I believe is a solid plan for protecting your financial future. I believe no one but me cares more about my future security. That means I need to learn enough about securing my financial future to make sure it happens. Here are 10 guidelines I’ve followed successfully. All are supported by major investment firms, including Vanguard, and Fidelity Investments—two of the biggest and most secure in the country.

1. Invest in Your Knowledge.

Take the time to learn about investing. It’s your money, and your future. Why trust it to someone else, without having at least a basic knowledge of what an investment counselor is recommending to you? I believe you can learn much about investing easily and quickly, by going to vanguard.com and clicking on the icon, “Education, Planning & Advice.” I found this site to be the easiest to use, and the most helpful. (Much of what I tell you is based on that site.) The Beardstown Ladies’ Common Sense Investment Guide is another good way to learn about investing.

2. Set goals.

The first step in sound investing is to determine your financial goal. Examples:

• To build sufficient assets for a comfortable retirement.

• To finance a child's college education.

• To make a down payment on your first home, buy a larger or a vacation home.

Goals serve several purposes. They:

• Help you focus on why you're investing.

• Help you chart the progress of your investment plan.

• Help keep you on the right course when market volatility tempts you to change

your investment strategy.

One example of a bad goal: “Double my money in five years." This "get-rich-quick" approach could encourage you to take more risk than is prudent for your situation.

3. Save and Invest.

Both are important, but quite different. Saving is storing money safely—such as in a bank or money market account—for short-term needs such as upcoming expenses or emergencies. Typically, you earn a low, fixed rate of return (now about 2-3 %)and can withdraw your money easily. Investing is taking a risk with a portion of your savings—such as by buying stocks or bonds—in hopes of realizing higher, long-term returns. How much money can you expect to earn from your investment? Although past performance is no guarantee of future returns, you can use historic performance as a guideline:

Average Annual Total Returns: 1926–1998

• Cash Investments (U.S. Treasury bills) 3.9%

• Bonds (long-term U.S. corporate bonds) 5.7%

• Stocks (Standard & Poor's® 500 Composite Stock Price Index) 11.2%

4. Use Dollar-Cost Averaging.

This simply means that you invest or save the same amount every month, regardless of market prices, returns, or interest rates. Because the amount you invest remains constant, you are able to buy more shares when the price is low and fewer shares at a higher price. As a result, the average cost per share—and the amount you paid for the shares—will always be lower than the average market price of the shares.

5. Save/Invest Automatically.

What you don't see, you won't spend. Set up an automatic payroll deduction or an automatic bank transfer. Many investment companies will transfer money automatically from your bank account to your investment account according to a schedule that you specify. This can make saving for retirement as natural as paying the mortgage. How much to invest? Depends on what you need at retirement age. You’ll find a simple “Retirement Planner” at the site of Quicken.com that will tell you in a few minutes how much you need to save each month to assure a set amount available for your retirement.

 6. Know Your Risk Tolerance.

To seek greater rewards—such as a higher investment return—you must be willing to accept greater risk. If you wish to minimize risk, you must be willing to accept lower returns. You can't eliminate all types of risk.

Of the three primary asset classes, cash investments (e.g., money market accounts, certificates of deposit) typically pose the least risk; bonds a medium risk; and stocks the greatest risk. But cash investments offer the least rewards, and stocks have the potential for the greatest return. That's why it's so important to diversify your investments.

7. Diversify to Reduce Risk.

Spread your risk across several financial investments, reducing the impact that poor returns from any one investment are likely to have on your overall portfolio. Investment advisor Bob Brinker suggests you never invest more than 4% of your portfolio in any one investment. (If Enron and Global Crossing employees had been allowed to do this, their life savings would still be secure, despite their company’s bankruptcy.)

The prices of cash investments, stocks, bonds, real estate, precious metals, and other investments often do not rise and fall in tandem. When one type of investment is on the rise, another may be declining. By investing in two or more types of securities, therefore, you increase the possibility that when something you own is doing poorly, something else you own will be doing well. Your winner's good performance can offset your loser's disappointing return.

8. Buy mutual funds,

rather than individual securities. Funds pool your money with thousands of other investors to buy an array of securities within a single asset class or even across more than one asset class. There are two types of funds: load and no-load.

A load fund charges you a sales commission when you buy the fund. A no-load fund doesn’t. (My advice: why pay a fund a commission for the privilege of buying the fund?)

Most have “back-end” fees—what you have to pay when you sell the fund. Make sure you know what those fees are. They can range from a low .2 % to 5 % or more.