Want to know if a layoff is on the way? Here's a list of red flags, along with an estimate of how likely those signs mean there's a layoff. To evaluate your individual situation, answer the following questions:
1. Are there publicly-announced money problems?
Companies that aren't adequately funded or have a negative cash flow have to get the money to operate from somewhere. Most of the time the easiest source of extra cash is through reducing payroll. So unless there's some obvious place the money might come from (e.g. another round of financing, the sale of property, etc.), layoffs are likely on the docket. If yes, score 20%
2. Have paychecks been sent late?
If a company's money problems are so bad that they literally can't make payroll, something is seriously wrong. The situation isn't sustainable and, because they're already dipping into payroll, layoffs can't be far away. If yes, score 30%
3. Not enough work to keep people busy?
This one's a bit subtle. Sometimes, rather than actually having a layoff, a company will test to see if a person or group is actually useful. They'll cut the work assigned to that group and see what happens. If disaster doesn't ensue, your pink slips might be in the mail. On the other hand, this might just be bad management or a seasonal lull, so don't panic. If yes, score 15%
4. Has there been a recent hiring freeze?
A hiring freeze basically means that a company has put its growth plans on hold and doesn't want to spend money hiring people whom it might soon be forced to lay-off. If yes, score 25%
5. Have there been more closed-door meetings?
It's never good news for employees when managers meet behind closed-doors. If there's an uptick in such meetings, it definitely means that something is afoot that the bosses don't want you to know about. It may be an acquisition or a strategic change in direction, but there's a decent chance it's a layoff. If yes, score 15%
6. Has there been less office chit-chat?
People being people, they can sense when something's amiss. Organizations about to face layoffs feel "tense," even when only a few people are in the know. Sometimes it seems as if you can cut the tension with a knife. While some organizations are naturally high-strung, if the atmosphere suddenly darkens, stormy weather may lie ahead. If yes, score 20%
7. Are office supplies getting scarce?
This is another sign that money is tight. Sometimes a memo circulates suggesting less use of office supplies; I've seen that memo go around in two organizations; both had a layoff immediately afterwards. If yes, score 35%
8. Does HR seem busier than usual?
Layoffs are to HR as tax time is to Accounting. Layoffs require a LOT of HR paperwork, so if the HR folk go suddenly busy beaver, well, you know why. If yes, score 25%
9. Are there layoff rumors?
Say what you will about the office grapevine, it's often your best source of accurate information. Because information about a layoff is so obviously important to everyone, news that a layoff might happen shoots through the grapevine at light speed. Usually such rumors are accurate. If yes, score 40%
10. Has management denied those rumors?
If management says something like "the rumors that there might be a layoff are totally false," it's a huge uh-oh because they'd never bother to deny the rumors if they weren't true. If yes, score 100%
If the percentage totals of all your YES answers exceeds 100%, it's time to brush up your resume and start networking. Remember: once the layoffs happen, you'll be competing with everyone else for the same jobs.
Of course, if you've been dreaming about starting your own business, well, this would be a good time to serious about it.