Downsizing in Corporate America has become a way of life. Until the economy turns around, jobs will continue to be eliminated. Hundreds of major corporations all over the country have decreased head count in order to save money and increase profits. When times are tough, the first expense a company looks at is payroll.
When this happens there usually isn't anything you can do to stop it. Take solace though, because you are by no means alone. With the unemployment rate at 4.8%, thousands of jobs no longer exist.
What you can do is make yourself aware of your current situation, and if the outlook is bleak, prepare yourself to move on. It all starts with becoming cognizant of your company's performance and looking out for signs that may indicate something is imminent. Most of the time employees that are let go are not aware of these signs until after the fact. By becoming conscious of some of these indicators, at least you can prepare yourself and get ahead of the game by exploring other opportunities.
Here are ten signs and indications that downsizing could be on the horizon.
Profits Down
Stay in tune to how your company is doing financially, with the key indicator being net profit. A decrease in profit is the first gauge to a high-level decision maker like a CEO that something needs to change. Simply put, either costs need to decrease or sales need to increase.
There is a difference between profits being down and a company actually losing money. A decrease in profits is just the beginning. But, if the company gets to the point where they are losing money it is more likely that corrective action will be taken.
You need to educate yourself by getting in tune with the company's financial key performance indicators, and know what they all indicate. Just because the company loses money for a month or two, does not necessarily mean there is a major problem. You have to watch for trends; how much money is being lost and for how long. The longer the duration and the higher the dollar amount lost, goes in direct correlation to whether or not something needs to be done. If the projection is that they can recover, then in all likelihood downsizing will not come into play. However, if they are so far behind they cannot catch up, employees need to be aware of possible trouble on the horizon.
Check your company's history. Try to find out if they have ever lost money before. If they did, what did they do about it? If your company has never lost money before, expect there to be some panic and major changes.
Corporate Reports and Announcements
If your company leader, usually the CEO, sends out monthly or even quarterly reports stating the financial status of the company, read these very carefully, especially if the company is struggling financially. More often than not, subtle hints are passed through these announcements.
The tone of the note and the financial results are your indicators of how the company is doing and where they expect the future to go. If the tone of the note is harsh, it is for a reason. It usually indicates that changes could be coming. Again, the financials are the tell tale sign. If they are not included, ask for them. You have every right to know.
Depending on the sense of urgency, many leaders include a plan as to how they will rectify the current status of the company. Look for terms like: reevaluating personnel; getting leaner; too fat in certain departments; positions being evaluated, etc. These are very clear indications that job eliminations are coming. Very few companies, unless they are major corporations followed closely by the media, will ever make a public announcement that they will be downsizing.
Policy Warnings
This is what I call the excuse announcement or set up. If your leaders send company wide notes to all employees, you must read them. Take heed to any company wide warning or reminder of policies that they feel are being broken. Any one of these policies can be used as a cause for your dismissal. And if they are, the company is not responsible for paying a severance package. They can even reject an unemployment claim.
Examples would be: abusing email for personal use; tardiness; abusing hours; smoking; not attending meetings; abusing travel or expense accounts; harassment; internet abuse; etc.
The reality is that most employees do bend some of these rules. And even though most are quite harmless, it is irrelevant. So, tread lightly. If a note comes out saying management is watching these behaviors closely or that they are instituting a zero tolerance policy, they could very well be looking to use these as a smokescreen excuse to let you go.
