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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.

AUTHORRob Gordon Insider Comment
  • an
    11 September 2008

    Peter Fuchs wrote: "....There go the bully-boy attitudes of Messrs Putin, Chavez and Ahmadinjad, bye-bye." Would that it were true. I'm afraid oil will have to drop below $70 a barrel before their power would diminish - and their "bully-boy attitudes" might persist even then. For oil to get that low, would probably require a deep global recession whose economic consequences for the U.S. and the finance industry would outweigh any benefits to our geopolitical standing. As for Japan still permitting employers to specify "gender, age, cuteness" requirements in a job posting, the gap between Japan and the U.S. is smaller than you might think. Take a look at this ad for private equity research associates, posted on this site today: http://jobs.efinancialcaree.... "Requirements: 2006 / 2007 Graduates ONLY...." Granted, it doesn't ask for gender or cuteness - but how is asking for graduates from a particular year different from specifying an age requirement?

  • Pe
    Peter Fuchs
    11 September 2008

    Interesting. Japan still permits search criteria in public media that specify gender, age, cuteness as well as skills and relevant experience. The recession of the late 90s up into 03 caused a huge dent in the age profile of firms that mostly rely on "lifetime" style employment, ie. everyone joins out of college and leave around 60 except for a smattering of technical mid career hires. Students are now being recruited as sophomores in college but this will soon come to an end. The global economy is highly inter-dependent so America's subprime shows up eventually, whether in Japan, China or India. Look at oil prices dipping below $100. There go the bully-boy attitudes of Messrs Putin, Chavez and Ahmadinjad, bye-bye.

    Best to you all.

  • Ma
    Machone Plus
    3 September 2008

    If your are 50+. Make that difficult to find out. "I have 15+ years of experience verses 25 years. Show the last 10-15 years of jobs and take the dates off of graduation. When telling stories about your kids, don't give their ages or if their married with children.

  • Ji
    Jim Bradley
    28 August 2008

    I'm curious to have one thing qualified:

    Do the figures for the "GE 20/70/10" Performance management program follow this pedagogue:

    20% of the people that are "indispensable" and must be kept
    70% that are "marginal", and can be retained, but could just as readily be disposed
    10%- just plain gone!!

  • ed
    28 August 2008

    Guys, it's nice to share the news but can someone tell when the market will shift? I ve been talking to colleagues who were laid off since January from MS and they havent yet got anything. It's true that age is a factor but where do we go from here is the question... I for myself am over 40 and considering going back for a masters degree instead of idling here. I'm considering part-time jobs that dont pay much to survive and if I get something lucrative in another area I will jump at it. I wish us all the best of luck and may this cloud pass rather fast.

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