This is somewhat of a rant as well, but please bear with me.
My current level is equivalent to that of an E4 at Meta. A Senior Level in my organisation is almost equivalent of E4 in Meta, while the next level is around E5. I have been trying to work towards a promotion since the last 2 years, working on RFCs, cross team projects, a lot of glue work, upskilling the team, writing a lot of documentation, reviewing outages and RFCs, mentoring junior engineers, delivering common libraries that can be used across the organisation, driving process improvements and writing tons of code. The last few projects were shipped without a single issue in production, despite being full blown revamps for services.
With layoffs happening in a lot of organisations (Twitter/Meta/Lyft/Stripe etc.), I am feeling a bit overwhelmed that it may happen to us as well, especially given the state of market. I am trying to keep my head low and improve myself. Brushing up the fundamentals right now. I am hoping that it would help me to improve in general as an engineer as well as in interviews, if need be.
My company required me to portray the next level behaviour for some time (close to 1-1.5 years) consistently to be considered for an up-levelling. Now with everything going around, Thinking that I may have to do the same for another 2 years in the next organisation hits me a bit. Overtime, there were some feedbacks I tried to fix - went through courses on communication and now it seems a bit unfair, even if out of control. I feel I could be overthinking but just feeling this way.
The main thing I'd recommend is to focus on the people and the learning. This is true regardless of the macro economic condition, but especially true when the economy is suffering.
Unless you really hate your job, I'd stay in your current role/company. It sounds like promotion is getting pushed back, but not much you can do there unless you're sure you can get an E5-equivalent level by interviewing externally (which is harder to do in this environment). Even if you do get laid off, a decent company will give you at least a month of severance so you should have time to find another opportunity. (I would not resign for this reason.)
Focus your energy on what you can control. You can't control inflation, the interest rates, or the company dynamics. What you can control is how you spend your time and what you prioritize.
The recession won't last forever. Think about what skills and opportunities you want, which will set you up for career hypergrowth when the things get back to a bull market. You can also try to talk to people at various companies who you think will emerge stronger from this period, and join those companies.