There are many euphemisms for layoffs: restructuring, right-sizing, furloughs, “going a different direction”, force-shaping, “exploring new synergies”, consolidations, cutting the fat, streamlining, work force reductions, headcount reduction, organizational re-engineering, resource reallocation and my all-time favorite, harmonizing.
Layoffs have become a common tool in the toolkit for many companies these days – changes in strategy, relocation, declines in revenue, M&A activity, can all trigger layoffs. The root cause in most instances involve money - or lack of it. Payroll is one of the largest expenses companies have and one of the easiest and fastest ways to cut costs. Most companies will keep pending layoffs a closely-held secret, with only a handful knowing the axe-man cometh. They do this for many reasons, most of all knowing that the best and most valuable employees will jump ship almost immediately, so they try to keep them in the dark about what is coming as long as possible.
In my tenure as a recruiter, I’ve met with many professionals right after they were laid off – and are still swimming in a marinade of bitterness, shock, and uncertainty. (On a side note, building a relationship with a recruiter on a reactive basis is not a best practice, a topic for another day.) Many, if not most, did not see it coming and were completely blindsided. I've worked with several who were directly involved in the planning and execution of layoffs from the start, only to find themselves left standing without a chair when the music stops. In hindsight, there were often plenty of signs they missed if they only looked for them. Here are some of the more common ones to be on the lookout for in your career:
A sudden interest in cost cutting. I call it “The Paperclip Memo.” Someone very high up in the organization, like the CFO, sends out an email asking 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 coming.
Perceptible decrease in revenue – a drop in orders, less goods in, reduced customer traffic, increased competition, loss of a major customer, changes in customer tastes, product recalls or bad press should be obvious to any employee.
Increase in unexplained visitors - either from the corporate office or mysterious suits (consultants).
Hiring freezes, even when positions have been approved and budgeted for.
Decrease in communication or availability of your manager or other managers – closed door meetings, off-site meetings, avoiding employees.
Equity events – Mergers and Acquisitions (either acquiring, or being acquired) or changes in ownership. Many companies looking to sell will take a short-term approach by reducing payroll to polish up the company balance sheet- assuming the impacts of a leaner team won’t matter to the people selling the company.
Others in key roles in the company start leaving – they might have more information than you do and are leaving on their own terms, a luxury you might not get.
You start getting cut out of the loop – not getting invited to meetings or ignored by the management team.
A new leadership team. A new CEO can often purge one group to bring in people from their previous companies. Or perhaps they have a track record from their previous companies and were brought in to make changes – nicknames like “Axe-man Al” are usually deserved.
Changing macroeconomic conditions – things like a recession or downturn to your industry – if the whole industry is hurting, your company probably is too.
If you start seeing the signs, there is no need to panic and jump overboard – you can still make sure your 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 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 – having a professional set of eyes looking out for job opportunities cannot hurt.
If you find yourself in need of a new role or are considering making a change, let us know. We can help!