Money Rehab with Nicole Lapin - Encore: Are You About to Get Laid Off?

Episode Date: June 25, 2022

Originally aired Oct 20, 2021. 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.

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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. Hey guys, are you ready for some money rehab? Wall Street has been completely upended by an unlikely player, GameStop. And should I have a 401k? You don't do it? No, I never do. You think the whole world revolves around you and your money.

Well, it doesn't. Charge for wasting our time. I will take a check. Like an old school check. You recognize her from anchoring on CNN, CNBC, and Bloomberg. The only financial expert you don't need a dictionary to understand. Nicole Lappin. Throughout the course of the last year, I have heard many, many stories about people

getting laid off. In the face of economic downturn during the pandemic, countless companies decided to furlough or lay off their employees to offset financial losses. Massive companies that you might think would be less affected by the pandemic that feel too big to fail, like Disney, Walmart, Comcast, AT&T, Nike, Microsoft, P&G, all laid off employees. As a result, unemployment skyrocketed to the highest levels the country has seen in decades. While unemployment is back on the decline and the economy is on the rise,

we're not out of the woods just yet. I wanted to create an episode to help people prepare for the worst after talking to some money rehabbers who were totally blindsided by company-wide layoffs. Here's one. 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. Consult 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 is 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, just in case. For today's tip, you can take straight to the bank. 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 to get straight from the source whether your company is going to be cutting costs in the near future and whether you should be really prioritizing rehabbing your resume. Money Rehab is a production of iHeartRadio. I'm your host, Nicole Lappin. Our producers are Morgan Lavoie and Mike Coscarelli. Executive producers are Nikki Etor

and Will Pearson. Our mascots are Penny and Mimsy. Huge thanks to OG Money Rehab team Michelle Lanz for her development work, Catherine Law for her production and writing magic, and Brandon Dickert for his editing, engineering, and sound design. And as always, thanks to you for finally investing in yourself so that you can get it together and get it all.