| There may be signs that things are not going well with an employer - warning signs that may give you an opportunity to lay the groundwork for protecting your assets and finding a job with a new employer.
Signs of Potential Trouble Pending
Sometimes you can see the layoff coming, but it can be very difficult. Many companies teeter on the edge of disaster for a long times. Others, seemingly on top of the world, can disappear very quickly. The Enron experience should be a lesson for everyone - management was assuring employees that everything was OK when it wasn't. So, don't believe everything you read and hear, but pay attention:
- What's happening inside the company?
Listen to the company gossip (within reason) and watch for changes in the company procedures with a focus on saving money, company budgets being squeezed too tightly, travel and/or hiring freezes, abrupt senior management departures, management known to be seeking a buyer for the company or parts of it, outplacement firms asked to submit proposals, etc. Tighter finances may only mean a temporary cash-flow problem or it could indicate bigger problems, depending on what else is going on.
- What does the outside world think is happening?
Pay attention to the news about your employer. Is there speculation about dropping sales, management misbehavior, serious problems with products or services, etc.
- What do the company financial reports show?
In the U.S., the Securities and Exchanged Commission (SEC) requires reporting from a publicly-held company (one with shares of stock sold on one of the public stock exchanges). Quarterly financial reports ("10-Q reports" in SEC-speak) and an annual report ("10-K reports") are published on a regular schedule. Get access at your public library, the SEC Website (via EDGAR), or commercial Websites like AnnualReports.com. Annual reports are audited by an outside accounting firm, but quarterly reports are not usually audited by outsiders. Look at the profits and read the footnotes. See what the executives are being paid, and how much of the company's stock that they hold are they selling. Low profits, and the executives (more than 1 or 2!) dumping stock are bad signs.
- What is happening to the stock price of a publicly-held company?
If the stock price keeps dropping over many months (or years!), that's not a good sign. The stock market may be wrong, but it may be right...
- Is the company "on the market" or being acquired by another company?
Often, even with prosperous companies, layoffs may be triggered when a company (or section of a company) is purchased by another company. When 2 companies are combined, some job functions are duplicated - 2 HR staffs, 2 financial staffs, 2 sales organizations, etc. Both sets of staffs are not usually needed, and, typically, the company which was acquired is the one in which people lose their jobs.
- Is there a WARNing?
In the US, companies meeting certain specifications are required to provide 60 days notice to affected workers and local governments in advance of plant closings and "mass layoffs." This is a requirement of the WARN (Worker Adjustment and Retraining Notification) Act. Not every layoff requires a WARN notification, so don't count on it, but it should happen if more than 500 people (or 33% of the "active workforce") are being laid off.
So, those are the signs. Read Preparing for a Layoff for tips on what you can do for yourself.
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