Signs of a Layoff: How to Tell If a Reduction in Force Is Coming

Companies can hold a layoff event for numerous reasons. Whether it’s to rightsize the company or to get over a temporary financial issue, layoffs are always stressful for everyone involved, making it vital for companies to actively review their layoff process to ensure that the event goes as smooth as possible.

But how do you know when a layoff is coming? Are their signs of a layoff? Is there anything you can do about them if you see signs?

These are a few of the questions we will answer in this article. Let’s jump right in.

There are numerous signs that a layoff event is coming. Here are a few of monetary-based ones, which are pretty easy to spot from any place in the organization:

• Budgetary Cuts or Freezes: A company can stop hiring, cut nonessentials severely, freeze spending, put a hold  on current projects, and many other things that can indicate that there just isn’t that much money in the budget. This type of sign is a little more subtle because it could simply be a strategy change that has nothing to do with layoffs. However, it’s still important to look for.
• Stock Drop: The easiest way to tell a layoff might be coming is to watch your company’s earnings or stock. Many layoffs are triggered by financial crises so if there are rumors or legitimate proof that your company is having financial issues, you should take notice.
• Flagship Product Failure: If your company’s most successful product – the product that they make most of their profits on – takes a hit or suddenly falls out of a favor, it can lead to layoffs as the company pivots to other areas.
• Perks Start to Disappear: Free lunches and other activities start to vanish.

These are all small, yet powerful signs that a company may be going through some hardships and are trying to cut everything except staff. It’s important, though, to remember that salaries and benefits are some of the biggest expenses a company has, meaning that layoffs might still be needed if all else fails.

Another good way to gauge whether or not layoffs are coming is to examine how senior staff members or high-powered leaders act. Here are a few examples:

• Upper Management Exits: If leaders of the business start to quit, look for new jobs or start working less hours, it’s a pretty big sign that something may be happening that lower level staff doesn’t know yet.
• Increased HR Meetings: See a lot of upper management meeting with HR more than normal? They could be going over layoff procedures or looking for other ways to reduce the workforce without laying people off, such as voluntary retirement incentives, furloughs, etc.
• Bosses Work Late, Communicate Slow: If your bosses are starting to work weird hours, avoiding issues you may have, seemingly drop off the grid, or act out of place, it might be a sign of a layoff or some other big change. It’s worth paying attention to, but it could just be a strategy pivot that is stressing them out.
• Day-Long Meetings: Are all of the upper managers in constant meetings in the conference room for what seems like days on end? They might be struggling to figure out what is happening and how to fix it.

Again, these are just some examples. Another sign is body language. For instance, if you have questions about a project that’s been put on hold or you need to ask your manager for money to perform some task, pay attention to not only their words but what they do with their bodies. Do they avoid eye contact? Do they shuffle about? Do they normally act like this? You can tell a lot about what a person is thinking by their body language – use it to your advantage.

Most of the time, people think that details about layoffs are all financial indicators. Though a drop in stock price or a failed product are definitely bad signs, the stuff – as in, the physical objects – in your workplace can also be pretty telling.

Here are a few examples:

• Where’d All These Tissues Come From? Notice that there are way more tissue boxes around than normal? The organization might be gearing up for notifications, which – as you can probably guess – can get pretty emotional.
• Boxes Everywhere: Unless your job requires you to ship countless objects from your office space, there are generally not that many boxes lying around that aren’t filled with paper or new office supplies. Why, if nothing else is changing, are there are all these empty boxes that are perfect to fit all of your personal belongings in?
• A Rise in Security: Just like with the tissue example, layoff meetings can trigger a ton of emotions. Some people might be angry that the company has let them go and if the organization is holding a big enough event, security may be brought on temporarily to make sure it goes smoothly.
• The Disappearance of Job Postings: If job posts suddenly disappear along with fliers and company outings, which may be posted on boards in the office, it could be a potential sign, too. You kind of need another thing to go on, though, because their could be other reasons for this.

Here’s an interesting example from Evany Thomas on Medium: ‘Uprooting of Plants’:

“No matter how secret an upcoming round of layoffs may be, the seal is never 100% rumor-tight. There’s always one old-school veteran who knows something. And the way you can tell they know is that they start bringing home all their accumulated personal belongings in easy-to-manage nightly shipments. Starting with their plants.”

It’s kind of funny, but also an interesting insight. If layoffs are coming and upper management is getting ready to break the news, one of the first – and most logical things – to be taken home or gotten rid of are all the plants around the office. It’s strange, but oddly true.

Besides all of the evidence you can see with your eyes that mat indicate a layoff is happening, there are also a ton of buzzwords that organizations throw around when an event is imminent. You’ve probably heard all of these before because many of them have become cliche.

Here’s a brief list:

• Rightsizing
• Downsizing
• Workforce planning (This one doesn’t always mean layoffs. You can read our recommendations here.)
• Reduction in force (RIF)
• WARN notice: If you hear talk of a potential WARN notice or have seen one
• Efficiency changes
• Layoffs: The rumor mill is strong. If you hear layoffs mentioned by your boss or your coworkers, it’s strong sign (obviously) that they are coming. However, you have to make sure you don’t jump to conclusions
• Outplacement

All of these buzzwords could mean layoffs, though it is important to check the facts and make sure you don’t spread rumors that aren’t true.

While all of these things we have discussed are good indicators of where your company is, there are a few that don’t fit easily into sections.

These include:

• Mergers: Mergers can be great for business, but they can also cause redundancies with staffing, triggering layoffs or other reductions in force.
• Too Much Growth: Growth, like a merger, can be great. In fact, it usually is. The problem comes in when a company grows too fast, over hires, and then has to rightsize later on. Typically, layoffs due to this action can be seen when the company starts to close branches or pull back growing operations quickly.
• Bosses Seem to Be Evaluating Roles: Bosses asking a ton of questions about your role? Think: the scene in Office Space where the Bob’s hold meetings asking the question: “So, what do you do here?” They could be looking to see where cuts can be made.
• Higher Ups Are Updating LinkedIn: LinkedIn accounts are great and all, but many people only start updating them often when they are about to be looking for a new role or are actively looking. It’s subtle, and probably nothing to really worry about, but could be a sign.

The sad thing is that unless you are in upper management there isn’t too much you can personally do to stave off layoffs. We recommend you do not panic or spread rumors without knowing for sure that your organization is actually holding an event.

The best course of action is to wait and see. To ease your mind you can see if your organization offers outplacement support for employees who are let go. Outplacement helps workers get back to work in a new role at a new organization. It’s a great tool for organizations to use to make layoffs as stress-free as possible.

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Josh Hrala

Josh is an HR journalist and ghostwriter who's been covering outplacement and offboarding for over six years. Before pivoting to the HR world, he was a science journalist whose work can be found in Popular Science, ScienceAlert, The Huffington Post, Cracked, Modern Notion, and more.