3 ways to tell if you’re about to be laid off

November 12, 2022, 1:00 PM UTC
A employee with belongings in a box
Layoffs can feel sudden, but there are some signs they're coming.
PixelsEffect — Getty Images

It seems like Elmo’s word of the day (or month) is layoffs—at least in Silicon Valley. 

Fueled by recession fears, companies have been laying off workers since the summer, from Wayfair and Ford to Redfin and Compass. Wall Street and Big Tech have taken hits, with places like JP Morgan and Goldman Sachs, as well as Snap and Coinbase issuing layoffs. Most recently, Twitter let go of almost half its workforce and Meta laid off around 11,000 employees. 

Often, service industry workers find themselves hardest hit during a recession. But the pandemic has flipped the switch: This time around, it’s white-collar jobs that have been on the chopping block. While the service industry had a hiring shortage, making its workers more in demand, white collar industries like tech experienced a hiring surge that some companies are now trying to rectify.

It’s no surprise, then, that some workers are feeling a little anxious about a recession and the future of their jobs. Some employees might be searching for a way to predict layoffs before it’s too late.

“The best point of action is not to sit idly and wait,” career strategist Adunola Adeshola tells Fortune. “Instead, arm yourself with options in case the worst occurs.”

Here are a couple tips for spotting the worst before it happens.

It’s about your company’s trajectory, not your own 

While layoffs often feel personal, they’re less about your own performance and more about the employer.

“Focusing on your own contributions rather than the company’s financial status is one of the ways employees miss the signs that they could get laid off,” Adeshola says. It could be true that your company might have a harder time letting you go if you bring in many clients, she explains, but the reality is that whenever there’s a large number of layoffs it’s because of financial reasons.

Some of the latest layoffs in the tech are occurring for that very reason. Mark Zuckerberg admitted that he miscalculated the longevity of the acceleration of e-commerce during the early pandemic. Snap, too, started layoffs as revenue growth fell.

It’s not uncommon for most recent hires to be let go. “The ‘last-in, first-out’ rule unfortunately still applies in many circumstances, and more often than not, people can be laid off very early into their tenure,” Jamie McLaughlin, founder and CEO of Monday Talent, told Fortune in June. But even if you’re bringing in the bacon or you’re not a new employee, you’re not immune to layoffs.

Look at the company’s revenues, suggests Roger Lee, creator of the website that tracks layoffs in the tech world, Layoffs.fyi. “Find out how much cash runway the startup has left,” he tells Fortune. “If it’s less than 12 months, the company is likely considering a layoff to make their cash outlast the current funding slowdown.”

If those at the top seem to be squirming, it might signal an upcoming layoff. Look to see if your company is implementing any cost-saving measures or if shareholders are unhappy with the company earnings, adds Adeshola.

Look around your sector for signs the ship is sinking

Certain industries are more affected by downturns or experiencing volatility. The tech sectors with the most layoffs during the third quarter are finance and crypto, healthcare, and food, Lee says. But that doesn’t mean your industry will be as impacted—or that you’ll suffer the same fate if you do work in tech. 

Startups and companies that did well during the pandemic and are now compensating for overgrowth are especially feeling the burn of the economy. Lee pointed to Robinhood and Peloton, which both downsized this year, as examples. Meta, too, is taking a hit here. 

“At the start of COVID, the world rapidly moved online and the surge of e-commerce led to outsized revenue growth,” Zuckerberg said in his memo to staff, in which he acknowledged he went on a hiring spree based on his prediction that this acceleration would continue post-pandemic.

Crypto, fintech, and real estate startups were all affected by the rising cost of interest rates, Lee says, adding that it’s about funding, too. “Startups who last raised funding over a year ago are laying off staff to make their cash last longer,” he says.

Keep an eye on how your industry is faring and where your company falls. “Reading the press coverage or company announcements can be helpful for understanding the reasons behind each layoff and seeing if there are any parallels,” Lee adds.

See if coworkers are noticing something is up

It’s not all about the numbers or industry news—take a vibe check on the company’s culture or how it feels when you walk into the office. Adeshola suggests asking yourself the following questions: Has there been a shift in transparency and communication? Is senior leadership providing clear direction regarding what’s ahead for the company? Is everyone walking on eggshells?

If tension feels high, go to a trusted coworker to see if they feel the same way or can assuage your concerns. “It might be helpful to broach the topic with a trusted colleague to see if they’re noticing any signs too,” explains Adeshola.

Be careful who you open up to though, because “addressing your fears with your boss or management in hopes of getting a concrete answer might not always bring peace of mind,” she adds.

While it might seem impossible, don’t let layoffs get the best of you. “Keep doing your best work so that even if you are let go, your track record of excellence leaves with you,” says Adeshola. She adds that it’s not about playing a waiting game for layoffs. Instead, it’s time to take control of your own trajectory and use this bad news as a time to pivot or “take your career to the next level.” 

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