The Bureau of Labor Statistics lists "contract completion" as one of the most frequent causes of layoffs. Companies, especially small ones, often hire employees to fulfill a large contract they've recently won. The logic is always expansionist and optimistic: Once we finish this one, there will be others like it; we'll be able to keep these people busy. But often the contract is just a one-time lucky break, or the company or agency awarding the contract decides to cancel or re-bid it. In any event, rapid expansion in response to "the big sale" inevitably leads to layoffs if and when the contract is completed or rescinded for whatever reason.
Layoffs due to unexpected changes in major contracts are sometimes difficult to foresee. The best way to stay informed is to form a good working relationship with the people who are most aware of possible changes in large contracts: either the account executive who "landed the big one" or the program or project manager responsible for managing contract completion.
By maintaining at least a casual, conversational relationship with these individuals, you may pick up on disturbing trends that lead you to believe the contract may be changed or canceled.
Managed Attrition
Managed attrition is a business euphemism that can mean, "Whew, there's one more we won't have to let go." Especially when a company is large, before its management tries any sort of whole-scale layoff, they may hope that careful attention to attrition and hiring will ease financial concerns. If your company suddenly becomes stingy in its hiring plans, this could be a sign that the problem is greater than it appears on the surface.
Signs to watch for here include cancellations of open personnel requisitions and attempts to retrain personnel for other tasks. You may have had an open request for a new analyst, only to find that your request has been canceled, leaving you to pick up the slack. Or your company may start trying to train accountants to be programmers rather than hire additional programming talent. Any of these signs show that the company is extremely concerned about head count, a situation that can lead management to try other means of reducing its payroll.
Merger Mania
Although the trend slowed after the merger-crazy 1980s, large mergers and acquisitions usually produce redundant positions within the new, merged company. Again, the best way to watch for signs of a potential merger or acquisition are to read trade publications. You may begin to realize a pattern in your industry, or you may even find articles reporting on specific rumors about your company.
Immediate plans for a merger or acquisition should be a cause for concern. Even if the merged organization is extremely successful, some jobs may need to be eliminated simply because their functions are redundant. If the merger is less than successful, many more jobs may be on the line as the new company attempts to reduce debt incurred as part of the merger. When Sperry Corp. and Burroughs Corp. were joined in one of the largest-ever computer industry mergers, the new company had lofty goals of giving industry giant IBM a run for its money. Instead, the new company stumbled. By the end of 1990, Unisys had fewer employees than Sperry Corp. alone had had before the merger.
What Are They Doing behind Those Closed Doors?
In the five years he worked for an entrepreneurial specialty chemicals manufacturer, Frank, a chemical engineer, recalls that the company went through more than a half-dozen layoffs. Each one was preceded by a series of long, closed-door meetings involving the top management of the company and a few other key managers. Meeting participants would often emerge tense and stern from these long sessions spent deciding who stayed and who went. Each time, those not involved in these meetings were aware of exactly what was happening. They waited "downstairs," creating their own whispered guesses of who they thought was "on the list."
"The worst part was knowing what was going on. It just seemed to go on forever," Frank related. "Because engineers were pretty much in demand most of the time, I usually didn't worry. But the rest of the company stopped dead during those times. Everyone knew what was going on, and the attitude was, 'Hey, if they're going to lay me off, why should I break my back meeting deadlines?'"
In larger companies, the process is much the same. If you are employed at the corporate headquarters, your department manager or director may be called into a series of closed-door meetings unrelated to specific projects for which he or she currently has responsibility. Directors or managers of branch or satellite offices may be called to the corporate headquarters more frequently than usual, with little or no explanation for the sudden spate of extra meetings. One key piece of advice: If your manager or director returns from one of these meetings and can't seem to look you in the eye or is obviously uncomfortable talking with you, get your resume together. You're probably on the list.
Frank said, "My boss was the worst person when it came to laying people off He'd come out of those meetings looking like someone just ran over his cat. You could tell he just hated that part of the job. He'd walk past someone in the hall, and just by the way he acted you could tell if the guy was on the list. It was a creepy feeling if he didn't look you in the eye."
