3 Signs Layoffs Are Coming at Your Company


NEW YORK (MainStreet) — The debt ceiling crisis may be over for now, but the jobs crisis only appears to be getting worse.

Private sector companies announced 66,414 job cuts in July, a 60% increase from June and the greatest number of layoffs in 16 months, according to a new report by the research firm Challenger, Gray & Christmas.

Most of these layoffs came from a half dozen big companies, the report shows, including Lockheed Martin, Cisco Systems and Borders, the latter of which recently began the liquidation process. This news comes on the heels of other worrying reports on waning small business confidence and a general increase in the unemployment rate, all of which suggest the job market may not be out of the woods just yet.

It’s impossible to know for sure what the job market will look like in the coming months, but as John A. Challenger, CEO of Challenger, Gray & Christmas, tells MainStreet, there are plenty of signs employees can and should pay attention to at their own companies to get a better sense of whether layoffs are on the horizon.

Company Performance

The worse your company’s performance, the greater the likelihood for layoffs. Perhaps more than anything else, this is the rule one can use to gauge job security at a particular business.

“If the company is consistently underperforming or their competitive position is being eroded, there may be job cuts coming up,” Challenger said.

There are several ways employees can keep track of this. For starters, it’s always a good idea to pay attention to your company’s earnings reports, with a focus on any significant changes to its stock price, which can provide a clue to the overall performance and direction of the company. Employees might also consider following industry news publications to see what others are writing about the company in relation to competitors.

Challenger also suggests watching for any announcements in earning reports or in the news about the company phasing out products or reallocating resources as this can be an indication that one department will face layoffs even if the rest of the company is spared.

New Management

Changes to a company’s staff often trickle down from the top, according to Challenger.

“When new leaders come in to a company, especially if there’s been a series of lackluster results, there may be change afoot,” Challenger says.

So if you start receiving lots of company-wide emails highlighting replacements for personnel in management and higher-level positions, it may be time to start weighing your job options.

Water Cooler Talk

You may not know whether layoffs are coming, but someone else at the company might. According to Challenger, if you start to hear a lot of chatter by the water cooler about job cuts in the near future, that could be a telltale sign of bad things to come, but it’s important to keep in mind the source of the information before you panic.

“There are plenty of times when the drumbeat of rumors is being led by the people who are the most inflammatory and most likely to exaggerate,” Challenger said. “So look at the source and ask yourself if it’s someone you think is really reliable.”

Ultimately, it may not be what your co-workers say so much as how they behave which proves to be the final clue that all is not right at work.

“Sometimes you just get a sixth sense about it,” Challenger said. “If it feels like nobody will look you in the eye, like the warmth has all of the sudden just left and there is an elephant in the room, that may be a sign of what’s to come.”

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