At The Rivet Group, we have worked with thousands of job seekers who have been part of a layoff. Many were totally blindsided. They showed up to work one day and their boss and HR were waiting for them. And just like that, they found themselves out of work and their life upended.
If they had been looking, they should have seen the warning signs long before they were walked out…but for one reason or another, they were either not paying attention or didn’t know what to look for. Here are ten of the more common red flags for you to be on the lookout for:
A sudden interest in extreme cost cutting. I call it “The Paperclip Memo.” Someone very high up in the finance and accounting side of the organization, like the CFO, sends out an email about everyone pitching in to cut costs – even routine costs of doing business like printing and office supplies. If the CFO is worried about how many paperclips and post-its the company is consuming, layoffs are imminent. If you survive the layoffs, you’ll be doing 2-3 jobs with no increase in pay or pay raises next year. Get out ASAP.
Perceptible decrease in revenue – less sales, less orders, less goods in, less customer traffic, new and able competitors taking market share, changes in consumer tastes, supply chain issues or product recalls. We are currently seeing this in pandemic darlings like Shopify, Wayfair, and Peloton, or companies like Meta (Facebook’s parent) whose lunch is being eaten by Tik Tok.
An increase in unexplained visitors in suits – The appearance of strangers in suits is usually not a good sign. They could be from the corporate office, management consultants, auditors or investors. If they are not introduced to anyone and there are lots of closed-door meetings, the company could be having financial problems, or is about to be sold.
Hiring freezes, even for positions that are vacant or have been approved and budgeted for. Easier than layoffs, but sometimes just a band-aid. At best, you’ll be tasked to get all the work done while being understaffed, or at worst, hiring freezes become hiring squeezes.
Decrease in communication or availability of your manager or other managers – frequent closed door meetings at the executive ranks, off-site meetings, avoiding employees. Any change in normal patterns can mean that something is up – especially if your boss won’t look you in the eye.
Equity events – Any changes in ownership or dramatic mergers or acquisitions (either acquiring, or being acquired) or changes in ownership. Within 6-18 months, there is usually some “rightsizing,” especially with support functions like HR, IT and Accounting. Sometimes companies looking to be sold will proactively reduce payroll to polish up the company balance sheet. I once picked up a 40-person supply chain planning department that had been let go “out of the blue.” Two months later, the company was acquired.
Executives start leaving unexpectedly – They might have more information than you do and are leaving on their own terms, a luxury you might not get. They might cover up the departure with platitudes like “leaving to pursue other interests” or “leaving to spend more time with family.”
You start getting cut out of the loop – If you stop getting invited to meetings or ignored by the management team, it could be subconscious, or intentional. Likewise if they start asking you to “cross train” someone else on your job functions. This can be particularly acute if you are a remote employee.
A new leadership team. While not a given, a new CEO, especially one hired from outside the organization, can often purge one team to bring in people from their previous companies. Do some digging and find out if they have a track record from their previous companies and were brought in to make changes – nicknames like “Axe-man Al” or “Chainsaw Mike” are usually deserved.
Changing macroeconomic conditions – things like a wide-spread economic recession or a downturn in your industry. If the whole industry is hurting, your company probably is too. There are other factors at play, like your employer’s financial position, but just because a company is sitting like a dragon on a hoard of gold doesn’t mean they won’t cut costs.
If you start seeing the signs, there is no need to panic and jump overboard – you can make sure the lifeboat is stocked up, so to speak. Refresh your resume & LinkedIn profiles, start reaching out to your network letting them know you may be on the market. Make sure you have a couple of months’ savings in your war chest or consider paring back expenses on your own to weather out a protracted job search. Let recruiters you have worked with in the past know you are on the market or build relationships with new ones.
Remember, the best time to find a job is when you have one. Unless there are substantial reasons hang in there (fat severance, stay bonuses, stock options that will vest if you are laid off) it is better to be proactive than reactive.
At the Rivet Group, we specialize in direct-hire recruiting for growth companies, if you are ready to look for a better role and advance your career, we’d like to hear from you. You can also find us on LinkedIn.