I read your whole post and although I feel bad for you, I do have a question: Can you answer for yourself WHY you felt it necessary to tell her that you knew about the lay-offs before they actually happened? And did you also share with her that you knew you'd be staying on, while she would not? What was to be gained by telling her this information?

I understand about feeling open and honest with a person, but along with that comes much responsibility. You said in your post you 'knew' she would react that way....so I'm a little confused about why you would go ahead and tell her. I believe there is a reason you did, and buried in your guilt is the answer.

Again, I'm sorry for your hurt feelings, but honestly, I can see where she was coming from with the reaction....and that is completely negating anything previous where you said she seemed not to trust your intentions anymore. Add to that, you felt you were friends, and her upset is totally understandable. This recession has hurt a lot of people and has been catastrophic for families across the country. The realization you knew she was going to be layed off (while you were not) and felt the need to TELL her about it ( not that you didn't tell her....that you DID, is the biggest humiliation, although I don't think you see that yet) must have hurt her very deeply.

I suggest you just move on, and let her go. For both of your sakes. Btw....please don't compound the error by telling her at some later date that you were talking to her daughter behind her back. That would serve no good purpose and would only hurt the daughter, whom you profess to like. Just a heads up, as you must have missed the last one.

Take care.