Money Rehab with Nicole Lapin - 6 Signs Your Company Is Headed Toward Layoffs

Episode Date: March 23, 2023

Imagining a scenario in which you get laid off is not a fun thought exercise. We all want to have job security, and it’s stressful to think that we might not. But the worst-case scenario is that you get laid off and it takes you completely by surprise. A better scenario (although still a sucky one), is to get laid off, but be prepared to chase your next opportunity. Today, Nicole shares six signs that your company might be announcing layoffs.

Money rehabbers, you get it. When you're trying to have it all, you end up doing a lot of juggling. You have to balance your work, your friends, and everything in between. So when it comes to your finances, the last thing you need is more juggling. That's where Bank of America steps in. With Bank of America, you can manage your banking, borrowing, and even investing all in one place. Their digital tools bring everything together under one roof, giving you a clear view of your finances whenever you need it. Plus, with Bank of America's wealth of expert guidance available at any time, you can feel confident that your

money is working as hard as you do. So why overcomplicate your money? Keep it simple with Bank of America, your one-stop shop for everything you need today and the goals you're working toward tomorrow. To get started, visit bofa.com slash newprosmedia. That's b-o-f-a dot com slash n-e-w pros p-r-o-s media. bfa.com slash newprosmedia. I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab. It's time for some money rehab. Throughout the course of the last few years, and especially recently, we have heard many, many stories about people getting laid off. In the face of economic uncertainty, countless companies have decided to furlough or lay

off their employees to offset financial losses. to furlough or lay off their employees to offset financial losses. Massive companies that you might think would be less affected by the overall economy, companies that feel too big to fail, like Meta, Google, Salesforce, Spotify, Microsoft, Disney, Goldman Sachs, have all laid off employees. And sadly, I don't think we're out of the woods just yet. So I wanted to put together an episode on how best to prepare. And I realized this was such an important resource after talking to some listeners who were totally blindsided by company-wide layoffs. Here's one. Hey, Nicole. My name is Abby, and I live in Providence. Before the pandemic, I was working for a digital media company. And over the course

of the past year, about 100 employees were laid off and I was one of them. I know that we can't predict things like pandemics, but can we predict layoffs? Are they somewhat predictable? Should I have even seen it coming? I don't ever want to be in this situation ever again. So I want to make sure I have my eyes open at my next job. Any advice is very much appreciated. Thanks. Well, imagining a scenario in which you get laid off is not a fun thought exercise for sure. We all want to have job security, security in general, and it's a stressful thing to think that we might not. But the worst case scenario is that you get laid off and it takes you by complete surprise. A better scenario, although still a sucky one,

is to get laid off but be prepared to chase your next opportunity. So if I was about to get laid off, I would want to know, wouldn't you? If your answer was yes as well, look for these six signs there might be layoffs at your company. Number one, if your company is falling behind on its spending plan. If your company is reporting losses or even just missing the mark on projected profit, yes, even companies have spending plans or balance sheets. If your company is reporting losses or even just missing the mark on projected profit, they're going to be spinning their wheels like you would personally if your budget was off to try to correct your trajectory. ASAP. This is an extremely high pressure situation for a company, especially a big one, to be in, especially if it's a public company, because investors are going to start to complain or even worse, withdraw their financial support if they think the company isn't making good on their financial promises.

To try and minimize their losses, a company will take a look at their balance sheet and try to cut some of their expenses. In dire situations, they might choose to shrink their workforce to tighten their purse strings. Number two. There is a freeze on growth. Was your company going to open up a new branch and then decided against it? Are departments getting consolidated or merged together? Have you heard that there's a freeze on hiring, bonuses, promotions, or raises? In most cases, companies don't want to lay off employees, so they'll try other solutions first. Typically, growth is expensive, so a company may freeze expansion to reduce costs. Number three, there is a pause on benefits. Similar to number two, another cost-cutting strategy a company may

try before layoffs is cutting benefits. During the pandemic, many companies stopped matching 401ks or other employee perks like gym memberships for employees or even little things like free lunches on Fridays. If your company starts cutting these programs, it's likely because they can no longer afford them. Hello, Captain Obvious. Number four. Consultants are hired. When a company is in trouble, the C-suite will probably hire a consulting team to guide the company back to financial safety. Unfortunately, many consultants will say the easiest way to cut costs is to lay off employees. Let's be honest. Consultants don't have the close attachment to employees and company culture that your executive team might have. Therefore, it's easier for them to make the hard decision of letting people go.

Number five, if your company announces a merger or acquisition. This is a sneaky one because you might think that an acquisition is a sign of a healthy growing company and that could be the case. However, if there's a merger between companies, all of a sudden there are two IT departments, two HR departments, and other doubling up of roles that your company likely doesn't need now or will not keep up. It sucks, but I have seen it happen again and again. Number six, relocating employees. This is another sneaky one because if a company is relocating employees, the company might market the move as opening a new office, which could be interpreted as a sign of growth. If you see your company do this, dig a little deeper. Is your company opening a new office because they are closing another

office and relocating employees? Some companies relocate employees to a state with lower cost of living or property costs or greater tax advantages because the company is struggling financially. Making a change this big could be a sign a company is on the last resort stage before deciding on layoffs. If you've been seeing some of these signs at your company, it doesn't mean that your company will definitely have layoffs, or even if they do, that your job specifically is at risk. But if you are seeing these signs at your company, you should probably take some time to update your resume. And here's my last piece of advice. If you work at a public company, see if you can listen in on the next earnings call. Your company will likely try to paint the best picture

possible but ultimately have to report the numbers. This is the best way for you to get straight from the source whether or not your company is going to be cutting costs in the near future and whether you should start updating your resume. Again, I know none of this is fun to think about. It is scary. It is stressful. But you can do hard things. Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan Levoy. Our researcher is Emily Holmes. Do you need some money rehab? And let's be honest, we all do.

So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me. And follow us on Instagram at moneynews and TikTok at moneynewsnetwork for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.