What Are The Telltale Signs Of A Department Layoff?

These clues can speak louder than a manager's reassurance.
There are business actions and legal notices that can point to an imminent layoff for your team.
AndreyPopov via Getty Images
There are business actions and legal notices that can point to an imminent layoff for your team.

Looking back on my first experience with a job layoff, I was caught by surprise in the moment ― but all the signs were there, had I known what to look for.

The day before it happened, our team manager suddenly scheduled an all-hands meeting at 4 p.m. on a Friday that I needed to attend in person. One week earlier, my manager’s manager stopped making eye contact with me in the hallways. In the month before, during business strategy meetings, higher-ups kept mentioning “pivots” and “restructurings” that would make my team increasingly redundant.

Hindsight is 20/20, but there are business actions and legal notices that can point to upcoming layoffs for members of your team. Here are some signs to watch out for before a meeting with human resources happens to you:

1. The company’s finances are not looking good.

“Employees should always pay attention to the company’s financials. A plunge in sales or revenue, cuts in essential budgets, and decreases in market and customer demands may foreshadow mass layoffs,” said Jie Feng, an assistant professor at Rutgers University’s School of Management and Labor Relations.

Your colleagues could hold valuable information on the state of the business, so you should cultivate relationships with those in other departments who could share a different perspective on the company’s finances, said Phyllis Hartman, founder of the human resources company PGHR Consulting.

Or, notice who is not getting paid. Donna Ballman, a Florida-based employment attorney, said employees should watch out for delays in their own paychecks or the processing of client payments. “If things are bouncing or late, or you start getting calls from vendors that they’re not getting paid, that’s a great sign of financial trouble, and I would say it’s time to start looking” for a new job, Ballman said.

2. There have already been layoffs.

If you want to know if your job is in jeopardy, consider whether management has laid people off recently, said Charlie Trevor, a professor of management and human resources at the University of Wisconsin–Madison school of business.

“There is an old adage that the best predictor of future behavior is past behavior,” Trevor said. “While the degree to which this holds is dependent upon context, those concerned about potential future layoffs should probably at least consider it. Companies that have engaged in layoffs before are more likely to follow that path in the future.”

3. You hear a merger or acquisition is taking place.

When there’s talk of a merger or acquisition, Hartman said, an overlap in responsibilities in the two companies could be a sign that layoffs are coming to your team.

“What you should do is look at that other company and see what they have and what you have, as far as you know,” Hartman said, citing an example of two banks merging in one area. “What are the odds they will keep two banks in the same neighborhood? Now one of those might go away.”

4. Senior leadership jumps ship.

Hartman said that companies do layoffs to survive and this action is often the result of financial issues. So, if you notice a pattern of senior leaders quitting along with poor company finances, that’s a notable signal.

“If your boss leaves, or you notice a number of people at higher levels leaving, that could be a symptom, because oftentimes people at higher levels know more about what’s going on,” Hartman said.

5. It’s the end of the week or the end of a budget cycle.

Hartman said employers often do layoffs on a Friday if they’re actually going to announce it to employees, because it gives those who are laid off and the employees who remain the weekend to process the news at home.

Layoff decisions may also be timed to end-of-year budgeting, Hartman said. “Year-end can be different for every company and that’s when they’re looking at financials,” she said. “A lot of companies are on a calendar year, so they may do layoffs in December.”

6. You’re now being avoided and excluded from information.

If you don’t get invited to long-term planning meetings, that could be a sign that the company is imagining a future without you in it.

“Before making layoffs, some firms may intentionally keep employees out of the information loop,” Feng said. “If they plan to eliminate an entire team or department, the affected employees may not be informed about the restructuring plan or invited to any restructuring meetings.“

When you feel like co-workers are avoiding you, that behavior change may be a sign that they know information about your job security that you don’t. Ballman said to watch out for conversations that end when you walk by, or a lack of eye contact, because they are signs you may be let go.

7. Your role is increasingly obsolete.

If there are rumors about layoffs, look at what jobs are being posted. If the new job has responsibilities that sound a lot like yours, that’s a sign you’re about to be eliminated, Ballman said.

If your job is getting more automated, that could also be a sign that foretells your employment end date. “Automation for the purpose of cost reduction could be a sign of coming layoffs,” Feng said. “If the jobs are simple, repetitive, and do not require much decision making, such as data entry, retail checkout, and cashier, automation is more likely to replace the workers.”

8. “Reorganizations” or “restructurings” are mentioned a lot.

Watch out for the language used in meetings with higher-ups in a position to know how the company is really doing. “If there’s a lot of talk about reorganizing, reengineering, restructuring, that could be a sign that organization may be saying, ‘Look, we don’t need exactly the configuration of individual jobs that we have,’” Hartman said.

If there is a restructuring, think about what business value your role adds to the organization. Your star performance alone is not enough to save you from a layoff if your skills are no longer going to be needed. “As companies think strategically and attempt to be responsive to the ever-changing competitive environment, even stellar performance can be accompanied by layoffs as a firm’s needs or expected needs for certain skills shift, necessitating hiring in one area while people in another are being targeted as redundant or obsolete,” Trevor said.

Elimination can be hinted at through corporate talk. Ballman said if your boss mentions “restructuring, or cutbacks, or outsourcing, or offshoring, or something similar, you should believe them that that’s coming. Those are all alarming words,” she said.

9. Hiring is frozen and pay increases stall.

Freezes on hiring and pay increases can be business actions companies take to prevent layoffs.

“Layoffs are costly and oftentimes risky,” Feng said. “There are legal issues to navigate, and the company may have to pay severance packages and take steps to reassure shareholders and boost morale among the remaining workforce. As a result, many firms choose to implement alternative practices before resorting to layoffs. These alternatives could include a freeze on hiring, promotions, and pay raises; a reduction in workload; and voluntary turnover incentives such as [an] early retirement plan.”

If these practices work to sustain the business, they may stave off a layoff. But if they are ineffective, “then companywide layoffs could be next,” Feng said.

If roles are not being backfilled, that’s also a sign that budgets are tight. Trevor said that decisions here and there not to replace individuals who quit “may signal a cost-cutting focus that will eventually manifest in layoffs.”

10. A WARN Act notice is posted.

Ballman said a WARN Act notice is more than a sign, it’s “a flashing neon light” that a mass layoff is going to happen.

The Worker Adjustment and Retraining Notification Act of 1988 requires employers with 100 or more employees to give advance written notice of at least 60 calendar days in the event of a mass layoff affecting 50 or more employees at a single site of employment. If your employer doesn’t give you this advance notice, you may be entitled to back pay or benefits for up to 60 days.

There are some exceptions to these protections, though. Strikers, government employees and temporary workers are not included. If you are a new employee and have less than six months on the job, or if you work fewer than 20 hours per week, you are also not protected by the WARN Act.

11. HR suddenly books up conference rooms.

When your layoff appears imminent, watch out for the suddenly scheduled meeting with human resources.

“For a mass layoff, one of the big signs is that all the conference rooms are suddenly booked by HR or by a bunch of managers,” Ballman said. “Those are the conference rooms that are going to be used to call people in one by one to let them go.”

What to do if you notice layoff signs:

If you spot some of these clues, don’t make assumptions that you are automatically going to lose your job. Do focus on what you can control.

If you think you have a legal claim, get your documents ready. Ballman said if you believe you are being targeted for a layoff due to discriminatory behavior, you should “make sure you have the documentation that you need so that if you are suddenly let go, you can be prepared to take that to a lawyer and discuss what leverage you may have.“

Job hunt while you have a job. Research has shown that it is easier to get a new job while you still have one. Hartman’s advice is to keep an eye out for new opportunities, so that if you have to job hunt suddenly, you are prepared. “You should always have an updated résumé or a list of competencies. You should always have your network going, so that you have people you can contact,” Hartman said. “It’s always good to be kind of looking.”

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