Signs a Layoff Could be Coming at Your Company

Experiencing a round of layoffs at your company is rarely a positive experience. Whether you’re laid off yourself or simply have to deal with the repercussions along with the other remaining employees, the uncertainty and insecurity around making future plans at work is almost always an unwelcome state of affairs. But layoffs don’t always come without warning, and if you know the signs that they could be coming and the circumstances in which layoffs usually happen, you’ll be less likely to be caught off guard. Read on for 6 signs a layoff could be coming at your company, and what to do if you notice them.

1. WARN notices
2. There’s been financial trouble
3. The company has merged or been acquired
4. There’s been a hiring freeze
5. Upper management is leaving the company
6. Employees have been asked to explain their roles

What to do if you see the signs

1. WARN notices

Of all the layoff signs, this is the most obvious. In some cases, companies are required to provide an explicit heads-up to employees that layoffs are imminent. This is called a WARN notice. If you receive one at your company, brace yourself, as this is about as certain as signs that layoffs are coming can be.

Named for the Worker Adjustment and Retraining Notification Act of 1989, WARN notices informing workers that layoffs are coming are required by law in some circumstances. According to CNBC, they’re required when a company is anticipating layoffs, has 100 or more full-time employees, and meets certain other parameters. Employers who fail to meet this obligation where applicable may be liable for back pay.

Read more about the WARN Act here.

2. There’s been financial trouble

Any kind of financial trouble could signal that there’s layoffs coming. Budget cuts, failed products, bad quarterly earnings reports, or a heightened emphasis on spending oversight could all signal that the company is in financial trouble and that layoffs could be a remedy. Every company experiences ups and downs, but if you see one or more of these signs, consider what you’ll do if things continue to take a turn for the worse.

3. The company has merged or been acquired

Layoffs are a common occurrence after a company merges with or is acquired by another company, especially if they’re in the same industry. According to Harvard Business Review, about 30% of employees in this situation are considered to be redundant. If you catch wind of this happening at your organization, be prepared.

4. There’s been a hiring freeze

Sometimes a hiring freeze is part of a labor hoarding program, the point of which is to reduce spending on recruiting and training new employees in favor of a focus on retaining existing employees. But a hiring freeze is also common when a business is doing poorly. Even if a company isn’t actively making layoffs, if it isn’t hiring, it’s going to shrink as employees naturally leave over time. A hiring freeze could indicate that the company is in revenue trouble and might perform layoffs soon.

5. Upper management is leaving the company

Keep an eye on executives and others in upper management roles. They have the clearest view of what’s happening at a company. If there are a lot of them leaving at once, it could be a sign that things are going badly and layoffs could be approaching.

Similarly, if lots of management are being replaced even in the absence of economic trouble for the company, it could signal that there’s been a change in direction and that new management is entering to shake things up. This situation can also sometimes lead to layoffs as new leaders try to show they’re making substantive changes and seek to bring in people who they believe will reflect their philosophy and goals.

6. Employees have been asked to explain their roles

If you or your coworkers have been asked to take a survey to explain your responsibilities (especially by an outside consultant hired by your employer), this is a sign that management is likely considering restructuring and making cuts and trying to determine who may be expendable.

If you were asked to take a survey like this and not everyone was, be particularly on alert, as this could be a sign that you’re being considered for a layoff specifically.

What to do if you see the signs

If you’re noticing these or other possible signs of layoffs, be prepared to look for new work. You could start looking in earnest right away or prepare your credentials and passively dip your toe in the job market.

Consider whether you’d like to continue working at the company if you’re spared in a layoff, and how soon you might like to move on to a new employer in either case. If you’d like to stay at the organization or could afford to have a bit of downtime between jobs, waiting for a layoff to play out could offer the advantage of a clearer view of the situation and/or severance pay, which may be preferable to jumping straight into new work. Conversely, if the situation looks like one you’d rather not continue to work in, looking for new work sooner rather than layer may be the more enticing option.  It’s up to you to weigh these and any other aspects of your situation.

Regardless, keep your eyes peeled – and be ready.

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