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Companies Give Off Signs Before Layoffs

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Mar 10, 2009 10:10 pm US/Mountain

Companies Give Off Signs Before Layoffs

Good Question: What are the signs my company is about to lay people off?

Written by Alan Gionet
Reporting
Alan Gionet
DENVER (CBS4) ― "I was assistant manager and it was heartbreaking because, you know, you're check-by-check," said one man looking for work.

The man didn't see his layoff coming and wasn't ready.

"I was working for a small owner and he just couldn't afford me anymore."

With unemployment at a 25-year peak and the mountain of layoffs likely to get bigger, it would be a good idea to know in advance.

"There's always some reluctance on the part of some employers to let the cat out of the bag so to speak because they're worried they'll lose the best people," University of Denver management professor Cynthia Fukami said.

Looking at the stock market isn't likely to help. With the entire market down, if your company is publicly traded, its public financials can tell you it is in trouble. But it may also tell you your company is not in trouble.

"We have businesses that aren't in trouble but they're strapping down anyway because they're scared," said Claire Chavez of The Wright Group, a Denver employee benefits and insurance consulting business.

Fukami says your company may be looking at the competition.

"As it's watching what its competitors are doing and it's trying to keep its costs in line with competitors or assuming that customers may be coming up on difficult times so they may be cutting back to prepare themselves," she said.

Many of the warning signs may be obvious.

"A layoff decision is essentially a cost-cutting move. So if you can start seeing cuts in your company; things like the travel budget. You're no longer having meetings off-site."

Look for lighter catering. When costs are getting cut, companies will soon look at workers.

The Wright Group's Bryan Wright gives the thinking of the embattled manager. A company with declining receipts has to think about it.

"If that business doesn't stay on the books then we're in trouble. We'll have to start laying off employees, etcetera," Wright said.

But Wright and Chavez say they have decided not to participate in the downturn of the economy. Good for them. Your job may be safe there, but just about anywhere else, keep an eye open.

(© MMIX CBS Television Stations, Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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