The pandemic along with changes in macroeconomics has led to companies cutting down on jobs and employees. According to a recent U.S. Bureau Of Labor Statistics study, 2 million people are laid off or discharged every month.
To understand the signals if your job is at risk, we sat down with Magda Chang, who has been in talent acquisition as a recruiter for over ten years and has experience working at companies like Meta and Zoom. This article will be helpful if you are looking for clues about whether layoffs are around the corner, or if you’ve already been impacted.
Why are the layoffs happening in 2022 and signs that your job is in danger -
Since the onset of the pandemic, there have been several layoffs in tech giants and across industries. As businesses got back to normal, the growth of organizations expanded rapidly, and the companies achieved excellent results in terms of financial performance. However, in the case of public-driven companies, the shareholders and markets expected similar growth, leading to cut-off jobs as growth targets were unmet.
Here are several factors that cause layoffs, along with clues on what to watch out for in your company.
1. Micro and macro economics
Organizations not meeting their growth targets may lead them to cut down their human resources to optimize their existing funds. Other external factors are also under play here like inflation, energy prices, and economic factors like globalization, food shortage, and, the energy crisis that can impact layoffs in the post-pandemic era.
Magda believes that most people, unfortunately, will go through a layoff at least a few times in their long career, however long they're working 2030, 40, 50 years.
Mergers and acquisitions might be a significant step for organizations; however, that does not always mean that it is a positive sign at the employee level. A merger or acquisition might put an organization in a redundancy situation, which brings us to the next sign that your job is in jeopardy.
2. Mergers and Acquisitions
A layoff might happen if your company is due to acquire another organization. As a result, the duplicate staff is moving to extra team members. This has a significant impact on employment rates.
Magda recommends always keeping yourself familiar with the company’s financial state.
Having that figured out can help you understand the revenue and whether or not the company has enough money to pay people’s salaries.
3. Poor financials
Identifying the company’s financial state by reading the financial results and logging into company earning calls will help you understand the organization's profits. So if the past few quarters have not been going well from a financial perspective and the earnings are not great, or the gains are not as high as before, this could mean a layoff is coming.
If your company's growth patterns suddenly stop or follow an unusual trend, that could mean that the company is trying to combat certain losses.
4. Hiring freezes
Hiring freezes are another common ground on which layoffs depend. For instance, if your company was hiring aggressively and suddenly all roles are on hold or progressing slowly, that could mean it is shifting its focus drastically. A big sign to watch out for could be if your company has started outsourcing work instead of getting the tasks completed by in-house employees.
5. Executives leaving
Another critical sign is if the top management or executives have started leaving the organization. In public companies, the executive-level individuals have a deep insight into where the company is going, the financials, the leadership, and the product. They are much more exposed to that information that might be confidential.
The senior management is undoubtedly the most cognizant of the stock prices as their compensation depends on the same; if they feel that financial burden on their paychecks, they are most likely to sense the same and leave the organization.
6. Companies who say there are no layoff plans is a warning sign that it might happen
Even using the term ‘layoff’ should be a warning sign when organizations suggest they will not lay off anyone. In such cases, they usually mean that they will, but not now. If you think from the company’s perspective, they don't want people to know because they do want the high performers to stay, in light of the cost of replacing people and training them. Because we were talking about the cost of replacing people and training them.
So they don't want to lay everyone off; they want to lay off 5-10% of their workforce in specific departments. So if they're saying we're not going to have layoffs now, but they use the word layoff or restructuring, that's just giving you a bit of a heads up that it will happen, but it's a question of when.
7. Cost-cutting - another sign to watch out for
Cost reductions are essential to watch out for in your organization and anticipate layoffs. Cost reduction is one of the last resorts for any organization when planning layoffs. For instance, if company lunches or retreats are being cut off and expansion is doubtful, employees should take that as a sign.
How to prepare yourself?
While these points show that layoffs are coming your way, being in the industry for several years, Magda says that these layoffs are usually not about your performance. Most of these reasons are around money and organization-specific credentials. Several global organizations offer severance packages to their employees while cutting their jobs down.
Don’t take the layoff personally, and don’t let it define you. She recommends you create and update your resume if you still have a few weeks in your job and make sure you're networking. Try and get feedback on your performance, prepare for upcoming interviews and take stock of what projects and avenues you explored in your current organization.
Networking is a crucial step in preparation for what’s next to come. Start looking at different opportunities in the market. If you are posting about your situation on LinkedIn, use the opportunity to be constructive – and market yourself! Mention your story and that you were let go, but then also share your resume, skills, accomplishments and make it a marketing opportunity for those who view your LI post. Upskill and indulge in self-training with skills and tools that can make you an asset to the following organization.
A final tip would be to arm yourself with new information and assist others in coaching or training to bring yourself a network pool for further growth. The most important thing to remember is that layoffs are solely about the business's health and do not define your talent. All you can do is stay prepared for any unexpected turn of events at your workplace!