15 Warning Signs Your Company May Be Heading Toward Layoffs

Layoffs have battered the American workforce recently. 

Perhaps no industry has been hit as hard as tech, which has seen over 220,000 people lose their jobs this year alone. Those tech companies include household names like Amazon, Google, Meta, and Microsoft.

While widespread tech industry layoffs have taken many of the headlines, experts forecast a recession for late 2023 or early 2024. Layoffs could find their way to your sector and your company, so it's important you don't get caught off guard.

Here are 15 signs that could mean layoffs are headed toward your company.

When a company starts slashing expenses, which could include cutting travel budgets and trimming down on bonuses, it often suggests the company is worried about its finances or what might happen to its finances soon.

In short, the more perks or fun stuff the company starts to cut, the more concerned you should be and the more you should prepare yourself financially.

Depending on the size of your company, you might be accustomed to seeing an influx of new hires. That’s not uncommon for businesses during economic upswings.

Unfortunately, the opposite is also true. Companies facing economic uncertainty tend to curtail their recruitment efforts as they aim to trim expenses.

Companies may terminate specific programs or initiatives when the economy seems unsteady or uncertain. 

That might mean discontinuing some products in development or putting an end to marketing products or services that don’t rake in the big bucks.

These decisions can have a profound effect on the teams who were working on them, including being laid off.

Being consistently excluded from meetings and communications might indicate your diminishing importance within the company. You should always ask, but it could be a sign.

Similarly, if you suddenly find yourself with a shrinking workload, and there are no attempts to address it, that could be a sign that you’re considered redundant.

Sudden changes in your boss's behavior can hint at layoffs. If your typically hands-off manager starts micromanaging or asking about your projects and contacts, it could indicate they're preparing to assume your responsibilities.

Managers may struggle to communicate during tough economic times due to conflicting loyalties. See if they can clarify the reasons behind these changes, as it could signal what’s to come.

When senior managers, who typically have access to information beyond the reach of lower-level employees, begin to bail, it can be a foreboding sign of impending company-wide layoffs.

At the upper echelons of management, the financial trajectory of a company becomes more discernible, and executives may choose to exit before a potential collapse.

Mergers between companies can enhance those companies’ overall strength and profitability, but they often result in the elimination of redundant positions.

So, while such mergers may benefit the companies involved, they can raise concerns for employees with overlapping skill sets. 

According to the Harvard Business Review, roughly a third of workers “are deemed redundant after a merger or acquisition in the same industry.”

Consultants are often brought in to assess company performance and identify areas for restructuring, including potential redundancies. The addition of time tracking is another common early sign of cost-saving efforts.

You should be particularly cautious if third parties are brought in to review the company’s finances.

The phrase “restructuring” typically means people will lose their jobs.

Sure, sometimes businesses reorganize for efficiency, but it's also a method by which companies assess and eliminate redundant positions.

If you see or hear that one company in your industry is going through layoffs, it might not mean they're coming to you, so there’s no reason to panic immediately.

However, it is worth paying attention to and keeping your ear to the ground so you can be prepared.

Hiring too many people too fast is one of the key causes of the recent tech industry layoffs. In particular, major tech companies over-hired during the pandemic because everyone had to work online and from home.

So, while tech profits soared when most of America was housebound, the reckoning arrived as the country reopened. Be wary of seeing too many new faces too quickly. There is usually a downside somewhere along the line.

If you’re suddenly expected to be there for a major company-wide meeting, and none of your coworkers seem to know what it could be about, expect the higher-ups to deliver details on some massive changes.

Frequent layoffs can suggest financial instability but don't panic if there's been one round. Multiple rounds, however, could signal ongoing issues. Surviving one round doesn't guarantee safety, either, so stay vigilant.

It might seem obvious, but if you suddenly find yourself locked out of emails, files, or even certain folders on the company’s network, it could be a sign and not simply a computer malfunction. It’s especially worrisome if you can’t get an answer from the IT department.

The WARN (Worker Adjustment and Retraining Notification) Act is in place to ensure that employees get a heads up from their employer if there are going to be “qualified plant closings and mass layoffs,” per the Department of Labor.

“Mass layoffs,” in this case, mean at least 33% of the workforce.

Navigating the waters of the corporate world can feel like trying to predict the weather when you’re not a meteorologist — unpredictable and full of surprises.

Hopefully, after reading the subtle, or maybe not-so-subtle, indicators can help you know when there are challenging times ahead for your organization. 

Understanding the signs allows you to make informed decisions and take proactive steps to secure your professional future, like making extra money.