Corporate Belt Tightening

It happens on occasion, and more often these days. Your company has a bad quarter, and senior management gets nervous and decides to trim the fat. Or the revenues don’t quite meet projections, the investors get antsy, and the burn rate needs to be reduced. Either way, you may get the sense the axe is about to fall.

At a larger company the warning signs are more evident, at least if you’re in management. The company cuts back on travel, expenses get clamped down, job reqs are trimmed, and finally a hiring freeze is put in place. Those are all pretty good signs that layoffs are just around the corner. Another is if mangers are asked to stack rank their employees when that’s never been done before in the company.

The signs are more difficult to spot at a smaller company (unless you work in sales), and the belt tightening often comes without much warning. Still, there should be clues you can pick up on to tell you whether the company might soon be downsizing.

Are the senior managers constantly huddled in all-day meetings, perhaps with outsiders? Do they avoid contact with employees and start cancelling regular staff meetings? Do the executives stop openly discussing company financials or prospects? And are key people suddenly leaving the company, voluntarily or otherwise?

If you pick up on any of these signs, it’s definitely time to polish up your resume. Of course, if you’ve been reading my blog you know that you should already have a current resume out there, anonymized if necessary. And as the financial advisors recommend, you should have at least six months of expenses saved up, more if possible. These days you really shouldn’t be surprised at all if the axe falls suddenly and without much warning.