From unemployed to self-employed: Why the switch is more common than ever

When Mikala Mahoney was laid off from her marketing job last summer, first she was shocked. Then the anxiety flooded in. 

“I realized that over the past few years in my career I had created a false sense of steadiness,” she tells Fast Company. Friends had regularly told Mahoney she was fortunate to have landed a good, stable job as a marketing coordinator at Paramount+. In a moment, that illusion was in pieces. 

Mahoney threw herself into the job hunt, quickly landing her next role. A few months later, she was laid off again. 

After losing her job twice in less than a year, this time she decided to bet on herself. 

Following the traditional path as a salaried employee with a steady paycheck, healthcare, and benefits had long been viewed as the safe bet. But with many people’s paychecks from their 9-to-5 barely covering the cost of housing and groceries, layoffs at their highest in the U.S. since 2020, and nearly 26% of unemployed people having been jobless for more than six months, the unemployed-to-self-employed pipeline has never been stronger. 

Mahoney spent two months unemployed before she made the decision to go all in on her content creation business. She has also been documenting the process for her following on TikTok. 

“I’ve always been making content,” Mahoney tells Fast Company. Still, she never envisioned herself as a solopreneur, or what that might look like in practice. 

“I think there’s a different sense of hustle that you need to have in your self-employment, that you aren’t necessarily forced to confront when you are working with a consistent paycheck,” she says.

Mahoney is not alone. The unemployed-to-self-employed pipeline has become its own content niche on TikTok. This sits within a wider trend of solopreneurship in the U.S.: Nearly 36% of traditional workers now have side gigs, according to MBO Partners’s 15th annual State of Independence in America Report. 

Whether a backup plan in the face of forever layoffs or a first step toward breaking free from the shackles of a boss, the rising number of people wanting to go it solo and run their own company of one reflects a shift in the balance of power from companies to workers—especially as the social contract has broken down. 

Increasingly, workers are turning their side gigs into full-time gigs, either taking the leap to solopreneurship on their own initiative, or as a result of factors outside their control. 

Then, there are those who have yet to experience traditional employment in the first place. Recent college graduates are struggling to find entry-level jobs and, while the overall unemployment rate edged up to 4.4%, for younger workers ages 16 to 24, unemployment in September 2025 was 10.4%. 

When 24-year-old Sophia Stern graduated from college in 2024 she spent hours scouring LinkedIn each day, an effort she kept up for roughly six months. 

“I was desperate for anything,” she tells Fast Company, noting that all she received in return were rejection emails from AI bots. 

At the time, she started a side hustle helping local businesses with their social media marketing. “I realized, like, oh, this doesn’t need to be a middle ground in between different jobs. This can be a job.” If it didn’t work out, she would at least gain valuable experience in an industry she was hoping to break into. 

“And it honestly might be better than continuing to search for a job, because the job market is just so terrible right now,” she recalls thinking. 

After launching a website for SoSo Social, offering social media management and community outreach to small businesses around New Jersey, New York, and Philadelphia, Stern landed her first two clients within a month. Less than a year on, her client base has quadrupled.

From launching an online business or monetizing a social media account, to selling templates or paid subscriptions, it has never been easier for workers to take their talents back into their own hands and find ways to monetize them. 

In fact, the MBO Partners report counted 72.9 million independent workers in the U.S., 5.6 million of whom reported earning more than $100,000 annually. 

Still, being pushed into self-employment before you’re ready, versus taking the leap on your own timeline, makes a big difference. “That was never what I envisioned for myself,” Mahoney admits. “My goal has always been to grow my platform, but I always wanted to do it alongside a steady and stable job.”

Stern, too, wouldn’t have considered starting out on her own this early in her career if other options had presented themselves. “I really was forced into it, but in the best way possible,” she says. 

Whether a side hustle, stopgap, or entire career pivot, solopreneurship often offers a lifeline in a job market increasingly throttled by hiring slowdowns, increased competition, and economic uncertainty. Not dedicating 40 hours a week to one employer protects workers from the powers that be. 

But solopreneurship, with its unpredictable income and lack of benefits, is not the panacea for all corporate ills—just ask any self-employed person. 

Mahoney and Stern are not closing the door on full-time employment. Both are still open to the right role if it comes along. “I’ve learned the big lesson that nothing is permanent,” Mahoney says.

This time, however, she has a safety net of her own making to fall back on.

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