Guest Blog: Warning Signs of a Layoff
Just to give some context to this column, I spent the last six years working at a major conglomerate before my job was eliminated in June.
For the first four to five years, the company was insanely profitable (better margins than Goldman), but in 2007 the competitive landscape shifted. After six quarters of lagging revenues and budget cuts, the layoffs started.
I've had a few people ask if I saw the layoff coming. I did. I misjudged the timing but there were five warning signs that I didn't respond to quickly enough. The first was an almost 100 percent turnover in the executive team. I spent my first few years with the company reporting into the divisional CFO and the vice president of product development. Both were pushed out by new management at the corporate level.
At that point, I probably should have started aggressively looking for a new position. However, I hung on through two more bosses (one stepped down and the other was pushed out himself). Although I've seen other people in similar situations, I didn't absorb the key lesson: Senior executives want their own people in key strategic roles. The last thing new executives want on their team is a former lieutenant to an ousted predecessor.
The second warning sign was that the hiring profile shifted from "the best candidate" to very specific criteria. For positions similar to mine, the criteria became: 30-35 years old, graduates of Wharton or Harvard Business School, and two to three years of strategic consulting experience. This isn't a bad profile for the job. The problem was I didn't fit it.
The third warning sign was contradictory messages from management. The new executive team routinely held all-company town halls celebrating the turnaround in the business. Yet hiring remained frozen and operating expenses were continually slashed. The reality is budget cuts happen when the revenue curve is going the wrong way, not after a turnaround has occurred.
The fourth warning sign was a change in the compensation plan. The most telling example was that sales commission rates were cut significantly from the previous year. As you'd expect, high-performing members of the sales team decided to find new employment, and revenue continued to decline.
The final warning sign was a mid-year change in the performance management plan. A new vice president of human resources was brought in, who implemented a GE-based 20/70/10 performance management program. Managers were told they had to identify 10 percent of their staff for potential layoffs.
So: What should you do if you're laid off?
Don't Burn Bridges: The decision has already been made and nothing you say is going to get the company to change its mind.
Get Everything In Writing: Unless you're an employment lawyer, you probably don't have the legal expertise to evaluate your rights and options. Get the separation terms documented and seek professional advice before signing anything.
Move On: In today's economy, there's no shame in being laid off. Tell everyone you know that you're looking for a new position, get out and start networking.
Rob Gordon (a pseudonym) is a senior professional who has held management roles in product development, business management and technology. This is the opening installment of his column. Future weekly installments will detail and draw lessons from his continuing job search.