How to Know When to Start Looking For a New Job (Layoffs Indicators and Other Problem Signs)

This is a question I got from a young salaried client in my tax/law firm who was scared of losing his job due to AI and the present bad economy.

As long term readers already know, my consulting firm also provides recruiting services and I’ve personally interviewed hundreds of candidates and gone through thousands of resumes over the years.

For those who want specific advice on resumes, I recommend checking out my No-BS Resume Guide.

For those who want an interview guide, check out 10,000 Interviews by Kyle Mau who currently runs a full fledged pure-recruitment firm.

If you want to rise in your existing company much faster (understand and deal with office politics, etc.), read 55 Essays by Corporate Machiavelli.

Okay, with that out of the way, here’s what I’ve learned from:

• My own hiring experiences
• Talking to people who got laid off (we have many “normal people” clients)
• From people doing the layoffs over my 12+ years of being in the tax/law consulting business (many corps, their CEOs, CFOs, etc. are our clients).

How to Know When to Start Looking For a New Job

1) The company has stopped growing, and the only way to grow is via the “vacancy” route.

In a growing company, new positions naturally open up because the business is expanding. New clients show up, new projects are being taken on, etc.

In a stagnant company, the only way to get promoted is if someone in the higher up either retires, gets fired, or meets his maker.

If you find that your company has turned into a stagnant company, and the only way to rise up the ladder is to wait for someone above you to be gone, it’s time to find a new job.

This is because your promotion does not depend on how well you perform and your skills and talents, but purely based on luck.

Life is too short to waste waiting for someone to die so you can take their place. Go to a different company that is growing, where your skills and talents will be more appreciated.

2) You work in a multinational company that missed its quarterly numbers a few times, and they’ve hired any of these firms to fix the problem:

• McKinsey
• Bain
• KPMG
• Deloitte
• PWC
• EY

Or anything else in that category.

Consultants from these firms hired to “fix the company” usually means that there will be layoffs soon where you will be replaced either with AI/technology, or by cheap outsourced labor.

3) Company policies designed to get people to quit.

Things like allowing people to work from home for a few months, and then instituting a mandatory return to office policy a few months later.

Many people end their rent agreements, move to a different (usually cheaper) city, and simply cannot return to working from office again.

This is a soft layoff, where you get to force people to quit without having to go through the trouble of announcing layoffs.

4) The company “expands” into a cheap third world country.

You will be asked to train these cheap foreign workers to do your job, and then you will be fired or made to quit.

5) Hiring freezes and budget cuts.

All of these are signs that the company is not growing or not doing well in business, and you should look for a better job with better prospects. (See #1)

This particular point sounds obvious but you’ll be surprised how many people are too naive and don’t see this as the canary in the coalmine.

Sooner or later, the consultants will show up (See #2) and there will be layoffs.

6) More documentation about your job.

This means things like:

• You are asked to provide info about which vendors you work with, the processes you use, and how much time it takes you to do it
• Asked for access/passwords to all the services you use
• Asked to make training notes on how to do your job in case of an “emergency” on your part

Basically, this is a sign that you in specific are about to be let go (especially if you’re also put on a performance improvement plan/PIP).

7) Tons of meetings of company leadership where no one else is briefed at all.

Neither you nor your boss/manager has any idea what’s going on.

Contrary to what you will hear on the internet, mass layoffs are decided by top management, and your manager is exactly as clueless about it as you are.

If there are a lot of meetings, but no one knows what’s going on, this is a sign of some very bad news at the company that they aren’t telling you about.

8) Rumors.

You will hear something or the other if you have the right friends. If the company isn’t going well and there are a lot of meetings, sometimes peons and IT staff can fill you in a little. Not always but sometimes.

My Personal Advice

And keep in mind that this is coming from a career entrepreneur and not a career employee, but in general it’s not the best to look out for signs of layoffs.

You are much better off constantly looking out for better opportunities.

Never think of yourself as the loyal company man. The era where people joined a company at 20 and retired from the same company at 60 is long gone.

You should always have an up to date resume and should always be looking for something better and higher paying.

Loyalty to a company in the modern day means NOTHING.

Companies are cutthroat mercenaries. You have to treat them the same way.

The company will get rid of you just to save a few bucks.

They could replace you with AI, or cheap foreigners, or whatever else.

They are not loyal to you. You are nothing more than a line item in a spreadsheet.

In fact, the decision to fire you is often made by people who have never even met you and is made regardless of your performance (e.g. the CFO shutting down a department).

If this is not obvious to you, you really need to read 55 Essays by Corporate Machiavelli.

Average people can’t read it because it’s “very long” but if you take a few days out and read it, you will understand the world you are in far more than others, and make the right decisions at the right time.

That’s all for this piece.

See you in the next one.

Your man,

Harsh Strongman

P.S. Read 55 Essays by Corporate Machiavelli