Just survived a big layoff. Big in the sense of half the company is gone from one day to the next.

What signs should I be looking for if they are not done yet? For example at the moment I have not much to do.


Well one sign is that they laid off half the company. Not having anything to really do will probably be short lived, since they will still be trying to meet the demands of the company they were before the layoff.

Signs they are in trouble:

  1. Financial reports. Now that they have laid off, you should see future earnings reports that are closer to being in the black. If they are still losing lots of money, the layoff didn't do enough.

  2. Bankruptcy. Bankruptcy doesn't mean they will shut down, depending on the nature of the bankruptcy. First they will try and restructure their debt. This will have the effect of getting rid of most debtors in exchange for most likely a bank. The bank will probably come in and remove many people in management and put their own people in place.

  3. Key management people leaving on their own. This could be a silent layoff, where they were asked to leave, or it could be that they know something. This is one reason you will often see key management getting big bonuses if they stay through the tough times.

  4. As I said above about bonuses. If management suddenly have huge bonuses if they stick around for the next few years, they are being bribed to try and save the company.

All of the above are not good signs, but the company could still make it. You have to decide if you have the opportunity to jump ship, should you. You will likely face any or all of the following during the comeback, if there is one.

  • Pay freeze or even pay cut
  • loss of benefits (especially 401k match)
  • loss of perks. If you had donuts and coffee provided, those probably won't be anymore.
  • extra hours. The company will be trying to salvage things and will be leaning more on their skeleton crew. Especially those that are salaried and not paid overtime.
  • hourly employees will see reduction in hours or loss of overtime opportunities.
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    Thank you. I especially like your third point, and that is one easy to spot. Tough times ahead... but at least I am still here for now. – user1220 Feb 13 '14 at 14:48
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    I would honestly recommend putting feelers back out there at the very least. If you're not relatively high up in the company, or have the reputation that replacing you would put them in a tough spot, you're easily expendable if the numbers swing towards more layoffs. Always easier to find a job while you have one. If you go into a job interview and your reason for being there is, "They laid off half the company, and I'm simply trying to protect myself in the event I don't survive the next one," no one will question you. – MattD Feb 13 '14 at 18:00
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    @MattD telling future employers you are bailing on the sinking ship may not sit well with some. Loyalty, while rare these days, is still something you want to convey in the interview. The employer will probably know that your ship is sinking, but I think focusing on better reasons for leaving like better opportunity, looking to grow etc., will be better received. – Bill Leeper Feb 13 '14 at 18:09
  • @BillLeeper A valid point. I'm pretty much coming from the 2009 recession where I was laid off, and it was basically all I had to say in my interviews. I agree that loyalty should be conveyed, and my phrasing was likely not the best and could definitely be worded better. Regardless, I still highly recommend putting feelers out there for other possible jobs, especially if this layoff came as a surprise to everyone. I had concerns about the previous company I was with and dismissed them, only to find myself on the wrong end of a downsizing, and I could have avoided it months earlier. – MattD Feb 13 '14 at 18:14
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    I was also in a bind similar to @user1220 in 2009. I was in management at the time and was privy to a few of the things going on. I also knew at the christmas party who was going to be laid off on the following monday, really tough. It became apparent in my case I was not in alignment with the rest of management and left on my own. I can't say for sure if I would have been laid off, but they replaced me with a developer level position making half as much and merged the management responsibilities under another manager. – Bill Leeper Feb 13 '14 at 18:19

The biggest question is - does the strategy sound reasonable? Most big layoffs some with some sort of presentation to the people left in the company. The general flavor is "we aren't totally screwed, we have this strategy... here's why we needed to layoff half the company, and here's what we're going to do with the folks that are left".

So my checklist is:

  • Did they do that?
  • Do you believe it? if the strategy doesn't make sense to a reasonably smart person, it probably doesn't make sense. And if they can't break past the business speak, do you trust them?
  • Is the strategy change inducing? "do more of the same thing" is generally a fail - so what's the change in business practice?
  • Are they making reasonable progress on the next steps? If change was part of the plan, then your company should be starting the changes. Can you see them?
  • Are your leaders active and empowered? OK, skipping the business jargon - do they look alive from the neck up? Are they communicating decisions and asking for input?
  • Do your skills and interest align with this new strategy, the changes underway and the communication you are getting from your leaders.

If you answered no to ALL of these questions - spend more time polishing a resume and job hunting than trying to figure out how to save this company.

If you answered no to most of these questions - don't stick your head in the sand, things aren't good. It'll be your call on how much energy to put into a hunt for a new job, vs. helping this company get the corrective action it needs. That's a huge "it depends" for you - your family situation, the economy in your area, you're willingness to change jobs, your skills, your industry - it all factors in to how you're going to approach this.

Realize that I asked the questions in an order that is likely connected to time progression. A company has to decide to make change, and then the various levels of leadership get moving at enacting it. In a big company, you may wait months between the first bullet and being able to answer "yes" to the last 3 bullets. And there may be areas of the company you may never hear about depending on your job. So don't expect that a company will immediately move from "we're in trouble" to "we're saving ourselves successfully".

If you can answer "yes" to every question, you may not be home free. You have a company that can take positive action and form a strategy that makes some degree of sense. But a great idea does not equal a successful business. The company's ability to mobilize is only one part of the economic climate. If there's no one to buy the new output of your newly reorganized company, you still don't have a long term job.

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Other signs to look for that a company is potentially failing would be:

1) Taking on a outside expert to help the business become profitable.

2) Excessive restructuring of the company and its departments.

3) Asking you to document or explain how to do elements of your role.

4) Management excessively cataloguing how many hours you spend doing a task.

5) Radical changes to the duties you did in your day to day role.

6) Increased focus on marketing and advertising of the companies services.

7) Changing business focus to new markets, products and abandoning old ones.

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