A layoff notice from FedEx starts several time-sensitive clocks that most employees don't know are running. On August 11, 2026, FedEx announced it is laying off 173 workers at ground and freight facilities across Southern California, including San Diego.1 These are not voluntary buyouts. The jobs are ending, and the deadlines below start from your last day worked, not from when you feel ready to deal with them.
This article covers every decision you need to make, in the order you need to make it. Unemployment first, then health insurance, severance, taxes, and your 401(k). Most of these have hard cutoff dates. Missing one costs real money.
- File for unemployment in California at edd.ca.gov the same week your job ends. Benefits don't go back in time.
- You have 60 days from your qualifying event to elect COBRA. Don't let it lapse before comparing Marketplace options.
- If you're 40 or older, don't sign the severance agreement before your 21-day review window is up.
- You have 7 days to revoke a severance agreement after signing. Know this before you pick up a pen.
- If you get a lump-sum severance, the IRS withholds 22% at the federal level. Your actual tax bill may be higher. Set money aside now.
What happened
FedEx is cutting 173 positions at ground and freight operations facilities across Southern California, with affected locations including San Diego. The company announced the layoffs on August 11, 2026.1 FedEx has not publicly disclosed severance terms for these workers.
Should you file for unemployment right now?
Yes. File the same week your job ends.
Unemployment insurance is a state-administered benefit, and California pays benefits only from the week you file forward. The system is not retroactive. If you wait two weeks to file, you lose two weeks of payments. That's not a technicality, it's just how the program works.
Because FedEx facilities in this announcement are in Southern California, you file with the California Employment Development Department (EDD), even if FedEx is headquartered in Tennessee.
Where to file: edd.ca.gov/en/unemployment/
California does not have a waiting week for unemployment. Most states make you wait one week before benefits start. California eliminated that requirement, which means you're eligible from the first week you're out of work.
When you file, the EDD will ask you to verify your identity. Have your Social Security number, driver's license or state ID, and employment history handy. If you have a Notice of Layoff or separation letter from FedEx, keep it. You may need to upload it.
California's weekly benefit amount is based on your highest-earning quarter in the past 18 months. The state calculates it automatically when you file. You don't need to do the math yourself, but expect your first payment within a few weeks of filing if your claim is approved without issues.
Use Layoff HQ's post-layoff checklist to track your filing date and benefit start date in one place.
What should you do about health insurance?
COBRA is a federal law that lets you keep your employer-sponsored health insurance after you leave. The key word is "keep", it's the exact same plan, same network, same coverage. The downside is that you pay the full premium yourself, including the portion FedEx was paying on your behalf, plus a 2% administrative fee.
The average COBRA premium for individual coverage in 2026 runs about $703 per month.2 If you had family coverage, expect more. That number is real and it surprises most people because they've only ever seen the employee share deducted from their paycheck.
You have 60 days from your qualifying event (your last day of coverage) or from the date you receive the COBRA election notice to decide, whichever is later.3 Here's what most people don't know: if you elect COBRA, your coverage is retroactive to the day after your employer plan ended. So you can wait out the 60 days to see if you need care, and then elect COBRA if you do. This only works if you're willing to pay the back premiums.
The alternative is Covered California, the state's Marketplace. Losing job-based coverage is a qualifying life event. It gives you a 60-day Special Enrollment Period (SEP) to sign up for a Marketplace plan outside of the normal open enrollment window.4 Marketplace premiums are often lower than COBRA, especially if your income drops significantly after the layoff, since subsidies are based on income.
Run the comparison before you decide. Your priorities: current providers in-network, prescription drug coverage, and monthly premium versus expected out-of-pocket costs.
How do you review your severance agreement?
FedEx hasn't publicly disclosed severance terms for these 173 workers. But if you're offered a severance package, a few federal rules apply before you sign anything.
If you're 40 years old or older, the Older Workers Benefit Protection Act (OWBPA) requires FedEx to give you at least 21 days to review a severance agreement before you sign it.5 If this layoff qualifies as a group termination program, meaning two or more employees were laid off as part of the same decision, that window extends to 45 days.6 Given that 173 employees are affected, this almost certainly qualifies as a group termination.
After you sign, you still have 7 days to change your mind and revoke.7 The agreement doesn't become final until that 7-day window closes. FedEx cannot pay you during that window, and you cannot waive it.
What to look for in the agreement: any clause that waives your right to sue under the Age Discrimination in Employment Act (ADEA), non-disparagement language, non-compete or non-solicitation clauses, and whether the severance amount is presented as a lump sum or in installments. Each of these has negotiation implications.
You don't have to sign the first version you receive. You can ask questions, propose changes, or have an employment attorney review it. The 21-day or 45-day window exists for exactly this reason.
What about taxes on your severance?
Severance pay is ordinary income. The IRS treats it the same as a regular paycheck for tax purposes.
When FedEx cuts the check, it will withhold federal taxes at the supplemental wage rate of 22%.8 That covers federal withholding, but it's not necessarily your actual marginal tax rate. If your total income this year (wages earned before the layoff, plus severance) pushes you into a higher bracket, you'll owe the difference when you file your 2026 return.
State income taxes also apply. California has one of the higher state income tax rates in the country. Check your withholding when you receive your severance stub.
The most important thing to do right now: don't spend the gross amount. Set aside enough to cover any tax gap. A common mistake is spending the full severance check and then getting a large tax bill in April.
The Q3 2026 estimated tax payment deadline is September 15, 2026.9 If your withholding on the severance is not enough to cover your expected tax liability for the year, you may need to make an estimated payment by that date to avoid an underpayment penalty.
What do you do with your 401(k)?
Your 401(k) balance doesn't disappear when you leave FedEx. You have a few options, and none of them are urgent in the way COBRA and unemployment are. But one of them has a hard deadline you need to know about.
Your choices after separation:
- Leave it in the FedEx plan. Most plans allow this if your balance is above a certain threshold. You lose the ability to contribute, but the money keeps growing. This is fine short-term.
- Direct rollover to an IRA or new employer plan. The plan transfers the money directly to the new account. No taxes, no penalties, no deadline pressure. This is usually the cleanest option.
- Indirect rollover. FedEx cuts you a check, and you deposit it into an IRA within 60 days.10 FedEx is required to withhold 20% for federal taxes when it issues the check. You have to deposit the full original amount (including the withheld 20%, out of your own pocket) within 60 days, or the IRS treats the shortfall as a taxable distribution. This option is riskier. The direct rollover avoids all of it.
- Cash it out. You can take a distribution, but you'll owe income tax on the full amount plus a 10% early withdrawal penalty if you're under 59.5. This is usually the most expensive option.
If you're not sure what to do yet, leaving it in the plan temporarily while you sort out more urgent deadlines is fine. Just don't forget about it.
Deadlines and rules described here reflect federal law and general state guidelines as of the article date.
The Layoff Guide
The deadlines above apply whether or not you are tracking them. The Layoff Guide from Layoff HQ is a 33-page field guide that covers all twelve post-layoff deadline events in the order they arrive: unemployment, the severance review and revocation windows, COBRA and the Marketplace, your FSA, your equity window, your 401(k), and your taxes. Each event comes with timed checkpoints, the decision math, and the one mistake that costs people the most, plus a fill-in worksheet that turns your last day worked into your complete personal deadline calendar. One-time purchase. No subscription. Instant download, with a 14-day full refund if it is not useful.
Get The Layoff Guide, $39 or build your free Decision Calendar.
- San Diego Union-Tribune. "FedEx laying off 173 workers at facilities in Southern California, San Diego." August 11, 2026. sandiegouniontribune.com
- Kaiser Family Foundation. "Health Policy 101: Employer-Sponsored Health Insurance." 2026. kff.org
- U.S. Department of Labor, Employee Benefits Security Administration. "COBRA Continuation Coverage." dol.gov
- HealthCare.gov. "Special Enrollment Period." healthcare.gov
- U.S. Equal Employment Opportunity Commission. "Age Discrimination in Employment Act (ADEA)." 29 U.S.C. § 626(f). eeoc.gov
- EEOC, OWBPA group termination review window. 29 U.S.C. § 626(f). eeoc.gov
- EEOC, OWBPA 7-day revocation right. 29 U.S.C. § 626(f). eeoc.gov
- Internal Revenue Service. Publication 15 (Circular E), Employer's Tax Guide. Supplemental wage withholding rate. irs.gov
- Internal Revenue Service. "When to Pay Estimated Tax." Q3 2026 due date: September 15, 2026. irs.gov
- Internal Revenue Service. "Rollover Chart." 60-day indirect rollover rule. irs.gov