Can you predict layoffs?
The simple answer to this question is yes, with the caveat that you will never know for sure and hindsight is 20/20 in all cases.
And, you should always be prepared for it financially and emotionally.
The first time I was laid off I did not see it coming because I didn’t have the business acumen I have now, and I trusted the people who ran the small firm I worked at just a little too much — because it was easier to do that instead of take the reins and look for another job during a market downturn.
And to be fair, it was devastating for them to shut everything down the way they did — if avoidable. There were at least a few tears. But I’m not here to talk about executives. I’m here to talk about what it’s like to be an employee and how to be prepared for shit to hit the fan.
Here were the indicators that things were amiss in our small, 30-person “web agency”:
One round of layoffs six months earlier removed our more strategic leaders and business development people. Our web strategist told me, “the writing was on the wall” — she definitely tried to warn me
I was the third person to be assigned to a loss leader and ultimately the project that I believe sank the company — a fixed-price $90K custom CMS implementation that had blown past that, well into the $300K range, before a single line of code was written (the statement of work was something to behold — I really should have known just by reading that)
No new clients were coming in the door, and we were losing long-term clients and projects
One of the leaders had me do side-of-desk work evaluating CMSs that looked suspiciously like he was writing a book, which turned out to be his exit strategy (and yes, he used my content in his book without credit)
When I asked hard questions about how the business was doing, specifically cost overruns on the project I was working on and what was up with that SOW, I was told (basically) not to worry my pretty little head
And then one day, every single employee — everyone — went into the CEO’s office and came out with a piece of paper.
I happened to be 10 weeks pregnant with my second child. It was July, 2001. I didn’t work again until my son was six months old, in October of 2002.
(Don’t let anyone sell you on the idea that pregnancy discrimination is a thing of the past. It is alive and well, just like my 20-something kids.)
It was inarguably one of the harder years of my life.
After that, I made sure I would never be that surprised again.
(This is not about my last job. Not, um, entirely.)
What I’m about to share is what any leader or employee should always be doing and looking at no matter where you work, but the tyranny of the urgent buries us in our work such that we have a hard time looking up.
And we don’t want to look for “negative” things.
This isn’t about seeing the bad!
It’s about situational awareness.
It is important, maybe even critical right now in this market, for us as people who have responsibilities to ourselves and sometimes to others as a leader to do these things.
Most important — know the business: understand how the business is really, actually doing. Get the heck out of your zone and talk to sales, customer success, and teams that can see what you can’t from where you sit.
Second — respond: take action when you see what’s happening to the business & market conditions. Do everything you can to pivot yourself or your team to what they need to be focused on, even if it hurts to let go of “fun” work. This is about job security. You might see attrition or you might need to quit, but that is still better than you and/or your whole team being laid off.
Third: know your leading indicators and assess them with detachment. It’s not personal; these things just happen sometimes.
They include, in order of oh-shitness:
Significant, but not totally unexpected, decline in what healthy looks like for your current business, highly successful direct competitors, & some churn around how to respond, followed by
Many rapid senior leadership exits
Hiring freeze, followed by backfill freeze
New policies about travel and expenses
New policies about tooling and equipment
Avoidance behavior or equivocation when hard questions are asked
Some organizational and daily work shifts, such as
Multiple re-orgs that don’t track given business conditions
New HR behaviors and policies around attrition
Multiple pivots on strategy, roadmapping & planning, or a disappearing/absent strategy
At times you’d normally be busy with planning work, doing performance reviews or salary conversations, they’re not happening
Taken individually, these are not in themselves indicators of an upcoming layoff. Some of them are just smart things to do no matter what, like being careful with expenses. Some of them are things that can be corrected before the business slides more downhill.
But when they start happening together, it’s not just “tightening our belts” or “responding to market expectations.” Something else is going on.
So if your spidey sense is tingling after reading this, go look at how your organization is really doing. Ask the questions. Pivot your team.
And start saving more than usual in your emergency fund.
In this market, if you’re an IC, you’ll likely need 6 months worth of income saved, if you’re a leader, more like 12.
You can thank me later.
