Layoff Lessons:Indicators Your Company Might Do a Reduction in Force (RIF)

by Brenda L. Peterson, The Layoff Lady

Change Is The Only Constant

Businesses are always changing. They constantly update their strategy to stay viable long-term. Changing staffing levels is one way they evolve to meet needs. While changes may bring great opportunities, they could also mean a few layoffs--or a company-wide reduction in force (RIF) may be imminent.
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Here are a few signs layoffs might be a-coming

​Economic Downturn

From the dot.com bubble, to the 9/11 attacks, to the subprime mortgage crisis, to pandemic fallout and beyond, economic conditions impact the viability of individual businesses.

For example, during the pandemic, we saw some businesses boom (like video conferencing) while others struggled (like hospitality). Consequently, for those organizations that were floundering, job eliminations followed. More recently, mortgage rates rose, causing mortgage companies to streamline their operations.

Financial Troubles

Not all companies are successful--even in a strong economy. Companies might miss their sales targets for a quarter (or longer) or start to lose market share to a competitor.

To adjust, they may start with small cost-cutting measures, like having fewer snacks in the breakroom or downsizing employee events. Then, on a bigger level, there may be hiring freezes, no raises, or stopping performance bonuses. There could even be temporary pay cuts or eliminating some benefits (like employer contributions to a retirement plan).
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Since salaries are one of the biggest line items companies have, eliminating staff is one way to address financial troubles that shows a significant, more immediate impact on the bottom line.

​New Leadership

Whether a CEO or a frontline manager, leadership changes can impact an employee’s future. When a president is replaced, a VP of a critical department moves on, or a manager leaves due to personal reasons, new people fill those gaps.

New leaders typically review the current state, assess staffing levels, revisit company goals, and make changes. This may include them bringing in their own people, restructuring departments, halting unsuccessful projects, or starting new initiatives. In some cases, they may bring in one or more consultants to make recommendations—including the jobs that will continue, their scope, and who will do them. ​

Ownership Change

When companies have new owners, changes are inevitable. Duplicate teams will combine and some positions may be consolidated or eliminated. In addition, differences in company values may mean that a department in one company is no longer valued in another.
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Regardless of the circumstances, one thing is sure. The organizations in question will determine changes that need to be made and move forward to strengthen the company—which may or may not include a job for you.

Restructuring

Occasionally, companies revisit their goals and decide to switch directions. For example, a call center might start expecting all agents to be able to answer all call types, then shift to having specialized teams, then decide later to outsource or eliminate a service altogether.
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Shifts take place to minimize costs or capitalize on a potentially lucrative market. Unfortunately, this also means that the job you have that was once considered essential may be deemed out of scope.

Reduced Responsibilities

On an individual level, changes to your job (especially if it becomes less challenging) may be a hint about the future of your role. If at one point, you led projects, and now you find yourself being left out of crucial meetings, take notice. See if this is an isolated incident or a pattern.
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This may also be a downstream effect from changes elsewhere in the organization. For example, a new manager may observe you doing your (now less challenging) job and see a misalignment between the value you bring and the salary you receive. Whether this is due to a new boss who isn’t your biggest fan, or one who has a former colleague they want to bring in to replace you, it’s important to pay attention. Changes in responsibilities may put you in jeopardy as the organization evolves.

Company Culture

Depending on company culture, the amount of voluntary and involuntary turnover varies.  While some companies have employees who have been there well over a decade, others may have the bulk of their staff there for less than a year.
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A larger, more established company has a better chance of longevity, while a tech startup may have more people regularly coming and going. Some may quickly decide if an employee is an organizational fit and take action. Others will have a structured (and often lengthy) procedure for attempting to correct performance before terminating. An organization’s mission, values, and day-to-day practices impact the likelihood that someone else will decide when you move on.

All of The Above

Sometimes, a layoff is inevitably caused by a series of events. For example, it may start as an economic downturn, followed by the company’s financial issues, then a leadership change, a resulting reorganization, and ending with the company being sold. ​

Learn More

• Some Employers May Be Using Layoffs To Get Rid Of These Types Of Workers (From Forbes)
• The Layoff Lady: I Just Got Laid Off--Now What? ​