Top warning signs your company is preparing for a layoff, according to experts
Amid high-profile layoffs at major companies like Meta, Amazon and Target, many workers are undoubtedly worried about downsizing in the future.
According to Jason Walker and Rey Ramirez, co-founders of Thrive HR Consulting, a significant portion of these recent layoffs can be attributed to artificial intelligence.
“Companies are seeing the ability to be more efficient and use less staff with AI, and so they are currently taking the opportunity to reduce staff,” says Walker.
Another reason could be that towards the end of the year, companies “start to look at headcount, start looking at cost, and based on that, general trimming of employees,” he says.
From an employee’s perspective, these layoffs may seem sudden, but according to Walker, Ramirez and other experts, there are a few signs that workers should watch out for that could signal an impending layoff.
Hiring and spending slow
According to Dallas-based high-volume hiring expert Jalonni Weaver, the number one sign of impending layoffs is a “hiring slowdown.”
Weaver says it’s a red flag when a company stops posting new roles or if roles remain open for months.
This could signal that the company might be in financial trouble, and for Weaver, the decline in recruiting meant his own job was in jeopardy.
Walker says a hiring freeze doesn’t necessarily mean layoffs are coming, but “it’s never a good sign that you’re in good financial shape.”
Similarly, he advises employees to be wary of sharp declines in company spending. When a company is strapped for cash, he says, perks like free snacks and ping-pong tables “go away,” and year-end bonuses may be reduced or eliminated altogether.
With these changes, Weaver says, “the culture often changes” and “no one is really happy.”
Enterprise messaging changes
Pay attention to what leaders say about the future of work, says Ramirez.
According to Ramirez, statements like “We need to be more efficient” are potential red flags that the company is looking to reduce headcount.
According to organizational transformation consultant Rosie Nestingen, when a company begins to emphasize operations over innovation, “this is often a sign that change is coming and people will be impacted.”
“If you focus on innovation and impact in one quarter and focus on ‘stretching out’ the next quarter, that could be a sign of impending layoffs,” he says.
“There are so many languages [plant] “It sows the seeds and lays the foundation for what is to come,” he continues.
People are streaming out
The last big sign of impending layoffs is “silent layoffs,” Weaver said, describing it as companies “finding ways to fire people regardless of their performance” without making formal layoffs.
Hourly workers, for example, may see their typical weekly work hours cut in half, Ramirez says.
“Employees can’t afford to live on 30, 40 or 50 percent less pay, so it starts to push people out of the organization almost by design,” he says.
According to Walker, RTO mandates can be used as another method to reduce headcount: After years of working remotely, research shows that many employees are choosing to look for another job rather than return to the office.
If co-workers and senior executives begin to leave the company voluntarily, Weaver says it might be a good idea to make an example.
They may be aware that the company is not doing well, or they may be overwhelmed by a lack of growth opportunities.
How can employees prepare?
If you notice red flags that may indicate: When it comes to impending layoffs, “don’t ignore it or think ‘it’ll never happen to me,'” Weaver says.
He says his biggest advice to employees is to “always keep your resume up to date.”
According to Weaver, it is very important to follow market trends. He advises employees to review job descriptions for similar roles and pay attention to which skills increase.
Weaver suggests asking yourself: “What has changed, what are they looking for in new people, and how can I get that experience in my current role?”
He also recommends that employees periodically apply for other roles “even if you’re happy in your job” to ensure their resumes remain competitive.
Walker has similar advice. “Your resume should be ready to go,” he says. “It should look the best it’s ever looked, and if you’re feeling the fact that you think you’re going to go ahead, start posting right away.”
In today’s job market, “you’re not going to succeed using traditional methods,” Walker says.
Rather than just submitting an application, Walker recommends contacting the hiring manager directly for the roles you want.
“Being able to be in front of people more personally is really important right now,” he says.
Above all, don’t get complacent in your job, says Weaver: “It’s okay to love where you work, but don’t get too comfortable with the place where you miss the signs that things are going on.”
“At the end of the day, businesses will do what they need to do for themselves,” he continues.
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