How to Identify Warning Signs of a Potential Layoff

Both employers and employees have learned at least one troubling lesson from the recent deep depression: Few employers are immune to downsizing and layoffs during down economies.

Nothing is more important than self-protection and survival. Learn to recognize some common warning signs that predict a potential layoff or downsizing period.

Company-Generated Layoff Warnings

These actions often predict and/or precede a coming downsizing. Be alert to these conditions and investigate further if your company does any of the following:

• Announces “weak” earnings or stock price declines. While poor earnings could be merely a short-term condition, they often signals deeper, more serious long-term problems. Should your company further admit that their profits were even lower than projected, their situation could be worse than assumed.
• Declares they are involved in merger or acquisition discussions. Organizations discussing mergers or acquisitions typically proclaim there will be minimum “employee disruption” should negotiations succeed. However, it is rare that companies can completely avoid some layoffs in these situations. Mergers and acquisitions seldom make financial sense without some downsizing.
• Hires outside consultants to advise on streamlining operations or to analyze current strategic plans. “Streamlining operations” and “analyzing” strategic plans or directions often means downsizing. Streamlining tends to translate to cost-cutting and employee reductions as part of resulting recommendations.
• Pursues expense reduction or cost containment plans. Declarations of overall expense reviews or cost containment evaluations typically result in some staff reductions. Since the largest expense category for many companies is “compensation,” these expenditures tend to “jump off the page” at evaluators. Senior management that literally translates cost containment to lowering the most obvious numbers in the operating budget is under strong pressure to reduce compensation.
• Announces plans to outsource some functions, particularly outsourcing overseas. Since the commercial emergence of China and certain third world countries, outsourcing important functions within and outside of the U.S. has become popular. This action is the most direct and public notification that layoffs or permanent terminations are on the horizon.
• Declares that a move to smaller, cheaper offices is coming. Another rather direct notification of impending downsizing activity, announcement of a planned relocation to smaller facilities is solid evidence of coming employee reductions. How would the company fit all of the current staff in a decidedly smaller workplace facility?
• Retains a security firm or increases current security levels. More subtle, yet just as telling as the above actions, increasing security is a strong signal that changes are coming. Of course, there may be a few other acceptable reasons for this activity, but in many cases increased security signals an impending large layoff.

Personal Warning Signs at the Workplace

These are some potential personal warning signals that a layoff or termination may be coming your way. Be alert to these signs and react accordingly.

• Your supervisor is suddenly and inexplicably “too busy” to meet with you.
• Your workload is reduced or you’re transferred from major projects to minor duties.
• You’re often left out of the loop and not invited to important meetings.
• Your boss reassigns you to totally different job duties—and you didn’t request a transfer.
• Your manager becomes too busy to meet with anyone else in your entire department.
• You’re requested to write a detailed memo describing your job duties and all of your key contacts, with confirmed phone numbers and e-mail addresses.

These warning signs should be self-explanatory and should tell you that something is amiss. Personal indicators may predict a company layoff or simply an individual staff reduction—you.

Recognizing these different warning signals should spur you to immediate survival mode. You will typically have limited ability to improve your situation. You might try to over-achieve and be noticed by management, hopefully becoming classified as a valuable, “must-keep” employee. But you may or may not have the time needed to accomplish this goal. In most cases, you’ll not have any ability to control the time factor, only the achievement component. Control it well.

Should you encounter any personal warning signs, it’s probably too late to use the achievement strategy to save your job at your current employer. Immediately enter job search mode, updating resumes, contacting your network members (friends, family, professional key contacts, etc.), visiting the best career websites, and contacting the top search firms, like Kelly Services.

You are now armed as an identifier of layoff and downsizing warning signs that are often missed by your co-workers. Utilize this advantage to its fullest. Prepare your strategy to survive a coming layoff or to move your career onward to another employer.