"I'm out of here, I know it," Marlene, an editor, recalls thinking. She was lowest on the seniority list and had less overall experience than one or two others in her department. The president seemed distracted and tense. He looked at the ceiling every few seconds and cleared his throat several times, as if looking for words.
"I know you've all been hearing rumors about our current situation," he began. "I'm here today to tell you that there is no cause for worry. Yes, ad revenues are down, but we don't plan any immediate changes. We have some plans in place to help increase our revenues. We'll wait until after the first of the year and then reassess our position."
"I was relieved," Marlene remembers. "I knew he seemed agitated and worried, but I really believed he meant what he said."
Three days later, the editor and three of her colleagues were laid off with two weeks' severance pay.
A generation ago, the "company man" myth was a reality. People could join a company straight out of high school or college, put in their 30 years, and retire with a safe pension. Somewhere in the middle of OPEC oil shortages, global competition, "stagflation," and supply-side economics, the company man disappeared. From the highest-paid vice president to the people driving the delivery trucks, no one's job will ever again be considered safe.
In the past several years, it has also become clearer that management jobs are at stake now more than ever. Companies that have experienced decades of growth now find themselves with huge middle-management ranks and declining profitability. In the last two decades, many companies have gone from having close to 49 management employees for every 100 non-managers to more than 59 managers for every 100 non-managers. Some huge companies have experienced an even greater growth in middle-management positions. Management experts are now advocating "demassification," a high-tech term synonymous with layoffs of hundreds or thousands of middle managers.
A desire to be more "Japanese" is also fueling the fire. Many American companies want to "slim down" by trimming the number of levels of management under which they currently operate. Some companies have 10 or 11 separate levels of management, while management consultants suggest that 4 to 6 may be a more efficient and manageable structure.
The critical question in an era of increasing employment insecurity is: How do I know if my job is safe? More importantly: What are the signs that my company may be thinking of letting me go?
Two common threads run through the stories of people who have lost their jobs: First, no matter how important you think you are to the company, any one of a number of factors may make you expendable. Second, in difficult economic times there are several significant warning signs that layoffs in general are on the way and that you may be on the list. These warning signs can be the key to your future. You can learn to read them and respond when you see them.
A pending layoff is like car trouble-before anything drastic happens, you usually experience a few knocks and pings. If you understand your car well, you can read the noises to know if something serious needs repair. With a little proactive effort, you can avoid being stranded at the side of the road. When a company is in trouble, it emits knocks and pings of its own. You'll find some of the more obvious noises, and some not-so-obvious ones, described below.
Bad News Travels Fast
One of the most obvious early warning signs to watch for is specific mention of your company's situation in the press. If you work for a large company, these signs will be prominently displayed in publications such as the Wall Street Journal or other business or trade publications. Often, news of rapidly falling revenues or rapidly rising losses is a sure indicator that the corporation is planning layoffs. Leaks of planned layoffs often reach the trade press long before individuals actually receive notice.
The more you read, the better prepared you will be for the inevitable consequences of a failing business.
According to Robert Tomasco, an expert on corporate downsizing, "One response many companies made to their stalemated growth prospects was to shift attention from market share to stock price as the key indicator of performance. This Value-based planning has led to a breakup of many conglomerates when they determine that the price-earnings multiple of their stocks is being held back by one or two lackluster divisions."
The result, according to Tomasco, is that a division of a large company may be forced to stand on its own. The cold light of day outside the safe environment of the corporate parent can result in numerous layoffs when the new organization realizes just how inefficient it really has become.
Forewarning of announcements such as these generally appears in widely circulated publications. If you work for a company whose stock is publicly traded, something as simple as watching your company's stock price and earnings numbers can give you an obvious but important clue.
The article goes on to say that Pratt & Whitney's spare parts business makes up one-third of its overall revenues and that this part of the business has been severely hurt by a downturn in the airline industry. You can see that if you had been reading the Journal all along, you probably would have already been aware of the factors leading up to this recent decision.
