Personal Finance

Are You About To Get Laid Off?

Throughout the course of the last year, I heard many, many stories about people getting laid off. In the face of economic downturn during the pandemic, countless companies decided to furlough or lay off their employees to offset financial losses. Massive companies that you might think would be less affected by the pandemic— that feel “too big to fail” like Disney, Walmart, Comcast, AT&T, Nike, Microsoft, Procter and Gamble— all laid off employees. As a result, unemployment skyrocketed to the highest levels the country has seen in decades.

While the economy is rebounding, we’re not out of the woods yet. Imagining a scenario in which you get laid off is not a fun thought exercise. We all want to have job security, and it’s stressful to think that we might not. But the worst-case scenario is that you get laid off and it takes you completely by surprise. A better scenario (although still a difficult one), is to get laid off, but be prepared to chase your next opportunity. So, if I was about to get laid off, I would want to know. Wouldn’t you? If your answer was “yes,” look for these six signs that your company might be headed toward layoffs:

1. Your company is falling behind on its spending plan.

If your company is reporting losses, or even just missing the mark on projected profit, they’re going to spin their wheels to correct their trajectory ASAP. This is an extremely high-pressure situation for a company to be in, especially if it’s a public company, because investors will start to complain, or worse, withdraw their financial support, if they think a company isn’t making good on their financial promises. To try and minimize losses, a company will take a look at their balance sheet and try to cut their expenses. In dire situations, they may choose to shrink their workforce to tighten their purse strings.

2. There is a freeze on growth.

Was your company going to open a new branch and then decided against it? Are departments getting consolidated or merged together? Have you heard that there’s a freeze on hiring, bonuses, promotions or raises?

In most cases, companies don’t want to lay off employees, so they’ll try other solutions first. Typically growth is expensive, so a company may freeze expansion to reduce costs.

3. There is a pause on benefits.

Similar to #2, another cost-cutting strategy a company may try before lay-offs is cutting benefits. During the pandemic, many companies stopped matching 401(k)s, and other employee perks like gym memberships for employees, or even little things like free lunches on Fridays. If your company starts cutting these programs, it’s likely because they can no longer afford them.

4. Consultants are hired.

When a company is in trouble, C-suite will probably hire a consulting team to guide the company back to financial safety. Unfortunately, many consultants will say that the easiest way to cut costs is to lay off employees. Let’s be honest: consultants don’t have the close attachment to employees and company culture that your executive team may have. Therefore, it’s easier for them to make the hard decision to let people go.

5. If your company announces a merger or acquisition.

This is a sneaky one because you might think that an acquisition is a sign of a healthy, growing company. And that could be true. However, if there is a merger between companies, all of a sudden there are two IT departments, two HR departments, and other doubling-up of roles that your company likely does not need, and will not keep.

6. Relocating employees.

This is another sneaky one because if a company is relocating employees, the company might market this move as “opening a new office,” which could be interpreted as a sign of growth. If you see your company do this, dig a little deeper. Is your company opening a new office, because they are closing another office and relocating employees? Some companies relocate employees to a state with lower cost of living or property costs, or greater tax advantages, because the company is struggling financially. Making a change this big could be a sign a company is on the last-resort stage before deciding on layoffs.

I’m seeing these signs… what should I do?

If you’ve been seeing some of these signs in your company, it doesn’t mean that your company will definitely have layoffs, or, even if they do, that your job specifically is at risk. But if you are seeing these signs at your company, you should probably take some time to update your resume, just in case.

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