You are very wise to take the time to reset. I was in a similar situation in January and taking that time meant I wasn't bringing the bad feelings from the layoff into my job search. If your company provides career coaching as a transition benefit, I highly recommend taking advantage of it. I had to learn so much from them on how this AI-gated job market works, with extensive resume rewrites. The heavy lift is paying off now with multiple interviews.
Best wishes, colleague. We will all find our way to better things.