3 Dangerous Assumptions About Layoffs

WorkCoachCafeIf your employer has recently begun laying off staff, time to pay attention to your salary continuation plan (and career self-preservation, as well). As anyone who has been through a series of layoffs can tell you, things do not generally improve.

A large study was done in the 1980’s that showed that once the layoffs began, the employer typically started a death spiral to out-of-business status. Similar recent studies have come to the same conclusion.

Having been laid off myself, in approximately the middle of an 8-year death spiral as my Fortune 50 (top 10% of the Fortune 500) employer disappeared taking over 100,000 jobs with it, I speak from painful experience about what I saw happen.

My recommendation if your employer has begun layoffs: head for the door as quickly as possible!

Do NOT quit until you have a job with a different employer! Begin your job hunt immediately –  do not wait for the ax to fall on your job before you begin looking for a new job with a different employer.

In my experience and in what I’ve observed in other layoffs, looking to transfer to a “safe” part of the organization is pointless. Perhaps part of the organization is safe, but, if a death-spiral happens, no part of the organization is secure. Better to leave completely!

Dangerous Assumptions Employees Make About Layoffs

When layoffs are happening to our employer, we all tend to make the following bad assumptions.

1. Layoffs are done very carefully.

Particularly when you hear the term “across the board” associated with the layoff, you know the layoffs are being done with a hatchet rather than a scalpel.

Unfortunately, studies show that layoffs are not usually done very carefully – or not carefully enough.

Countless studies have shown that layoffs reduce productivity (and, unfortunately, profitability) as well as employee morale and customer service – the start of the death spiral for many organizations.

Key knowledge workers and other important contributors are lost because they were in the wrong part of the organization at the wrong time. As a consequence, the whole organization suffers and long-term survival becomes more problematic.

The layoffs themselves – and trying to work around the missing people and functions – become a major distraction, and employee motivation as well as productivity actually decline rather than increase.

2. Being a top performer means my job is safe.

No. Unfortunately both for the employer and for the employees, being a top performer is no guarantee of job security (and salary continuation). Countless studies have documented that reality.

Based on my personal experience and the experiences of many others, being a top performer will not save your job. Being well-connected to a manager involved in the decision-making process is what will save your job, as long as that manager remains in a decision-making position.

But, going back to the death spiral scenario, remaining in the organization typically means you will be expected to do more work (those people who were laid off were doing something!). Unfortunately, being more productive is difficult with fewer resources and with fellow employees also worried about their own salary continuation programs.

3. Job hunting will be easier because other employers know about the layoff.

To a certain degree, this is true. If you are part of a major corporate implosion (e.g., Enron, Lehman Brothers), you don’t need to explain why you are job hunting – anyone paying even minimal attention to the news will know.

However, if the layoff was from a smaller failure, employers will tend to make unfortunate assumptions about you like these that can make your job search much more difficult:

  • If you were a top performer, you would still have a job.
  • If you were a top performer, you would have left before you were laid off.

You will need to overcome those assumptions – no matter how untrue – to find a new job IF you wait until you are laid off to look for a new job.

Don’t Equate Layoffs and Firings

If you were laid off, you were NOT fired! Your employer no longer needed someone to do your job, so your job was eliminated.

You were part of a corporate headcount reduction, not someone who was fired because they were not good at their job.

So, don’t – even to yourself – equate being laid off with being fired.

Yes, you lost your job, but not “for cause.” You lost your job with many other employees in a layoff, not because of your job performance. That is very different!

Signs a Layoff Is Pending

Often, you will hear about business and/or profits declining or dropping. Worst case, you will hear about losses (vs. profits). Very senior executives will leave suddenly and unexpectedly or the media will speculate that the whole – or a part – of the organization will be acquired by another organization.

Most employers send out warning signals about “cutting back on spending” which usually means:

  • No – or greatly reduced – new hires.
  • Travel budgets are cut.
  • “Frills” like tuition reimbursement and new technology investments are ended.
  • Salary increases and bonuses are slowed down or stopped altogether.

Those are not the only signs! Pay attention to the internal “buzz” about what is pending, particularly if jobs are being out-sourced.

Best Strategy: Head for the Door When the Layoffs Begin

As shown in assumption number 3, above, your loyalty to your former employer will be penalized, not rewarded.

I saw this over-and-over in the layoff I experienced, and I have heard that same theory voiced by many recruiters since then.

If you stayed after the layoffs began, it’s only because you couldn’t find a job somewhere else. Not loyalty. Lack of opportunity.

When the ax starts to fall (or when the scuttlebutt inside the organization says that layoffs may happen soon), start very quietly looking for a new job elsewhere:

  • Decide where you want to go next.
  • Ramp up your LinkedIn and face-to-face networking.
  • Keep your plans quiet (so you don’t get fired or added to the next list of “redundant” employees).

You would think that layoffs are better understood these days than in the past, but they aren’t. And, even prosperous employers like Google have had layoffs (and defied the death-spiral theory, so far).

Check Potential Employer Layoff History

The top employers are the employers who resist laying off employees when times are tough.

So, before you apply for a job at Company A (or whatever), do a search on:

“Company A” layoffs

If you find no layoffs associated with that organization’s name, take that as a good sign. Perhaps, they have been lucky (or had good management) so that layoffs were not necessary. Perhaps they have a no-layoff policy, like many good employers do.

More About Layoffs and Job Search

Layoff Self-Defense in 7 Steps

Should You Quit Your Job? NO!

Job Hunting While Employed: VERY Dangerous

20 Ways You Can Blow Your Cover in Your Job Search

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About the author…

Online job search expert Susan P. Joyce has been observing the online job search world and teaching online job search skills since 1995. Susan is a two-time layoff “graduate” who has worked in human resources at Harvard University and in a compensation consulting firm. Since 2011, Susan has been editor and publisher of WorkCoach since then.  A veteran of the United States Marine Corps, Susan also edits and publishes Job-Hunt.org, is a Visiting Scholar at the MIT Sloan School of Management, and a columnist on HuffingtonPost.  Follow Susan on Twitter at @jobhuntorg and on Google+.

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