17 Warning Signs That Layoffs Are Coming: Clues for Looming Company Layoffs to Look Out For
- Corporate Kate
- Sep 6
- 11 min read
Updated: Sep 9
Is it just me or is everything "doom and gloom" around here recently? That was the question I was asking myself right before a massive round of layoffs hit my organization in 2024. Turns out I was right to think something was going on and if you are getting that feeling you are probably right too. While there may be many clues that are obvious to decipher how your company’s leadership is working through financial strain, some may be much harder to spot. Compiled is a list of 17 potential signs that your company is looking at making a big cost-cutting move... and it might mean they are saying goodbye to you in the process.
Table of Contents:
Your company was recently acquired or merged with a different company
Your company is not hitting its revenue goals or is having high client attrition
Your company has hired an outside consulting firm to review your team's processes
Political policies are being enacted that directly affect your industry
You notice a cultural shift happening from the executive team
Your company has recently opened an offshore office, or some team's operations have moved abroad
Hiring has been put on pause, or the company is only hiring for offshore positions
You (or people you know) are being placed on PIPs unexpectedly
There has been a mass exodus of executives in a short period of time
Technological advancements are being pursued for efficiency (AI)
Your company was recently acquired or merged with a different company
If your company has acquired or completed a merger with another entity, chances are that the businesses themselves are going to be run similarly to each other. And that includes the employees needed to run each company. Once product lines or processes are fully merged, there won't be the need to maintain the same amount of staff to manage one cohesive system. Areas such as Finance, HR, and Operations tend to take some of the biggest hits in these scenarios.
Bonus Sign: Are you noticing that people from your previous company are not being given leadership roles in the merger and that the other entities staff appears to be leading the changes? That is a big sign that it's your portion of the company about to get the axe.
Private Equity is looking to invest in your company, or there is talk of the company having an IPO
This one almost seems counterintuitive. If investors are wanting to fund and grow what my company does, isn't that a good sign? In the long run, maybe. But in the short term these private equity firms or investment banks doing the IPO underwriting want to see as perfect of operating numbers as possible before making their investment or bringing the business public. If they think that the company should be operating leaner comparative to their competition they will put pressure on the company to make changes to meet those goals.
This sign might not be easy to spot if you aren't in a leadership position, work remotely, or don't have forthcoming executives. Set up a Google news alert for your company and check it periodically as business publications will post about possible investments or IPOs that are about to be announced about most large private corporations.
The company is not hitting its revenue goals or having high client attrition
I bet you already knew this one was going to make the list. That is because a company facing financial difficulties through revenue or client loss is most likely to cut associates to make up the difference on the balance sheet. If you notice that your organization is losing more clients than it is bringing in new this year or the amount of those client contracts is a lot less than previous years than have your eyes and ear open for news of a potential layoff.
Bonus Tip: Your finance team might treat any internal communication on financials the same way it would share it with shareholders: overly positive despite financial misgivings in the data. Regardless of the tone used in the presentation, what does the data actually signify? A popular misdirection is saying that “we are on track to meet our goals by the end of the year”. But what do the previous quarter's financials look like? How far behind and how much is in the sales pipeline that can be made up? Use your better judgement to ascertain what is really happening. Especially if year-end bonuses are on the line if metrics aren’t hit, companies may fudge how things are going so associates don’t lose steam at the end of the year.
Your company has hired an outside consulting firm to review your team's processes
Anyone who has worked in corporate America for even a short amount of time is going to become very familiar with consulting firms that are there to "help" businesses make decisions for greater efficiency and profitability.
But if your company is not doing well or a new executive team has taken over, chances are that consulting firm has been hired to help them figure out where to trim the proverbial fat from the organization. If the consulting firm has specifically been hired to review teams in your organization and find out how they operate, be extra wary. They may be creating documentation that will be used to replace you with a new process or an outsourced team.
Being asked to document your time or your processes
While we are on the subject of documentation, a request to have your job outlined in more detail for higher ups can be a sign that layoffs to your team are coming. This one is much more nuanced, as this could be part of a greater company initiative to better track different workflows across the organization, so take this one into account only if the other signs are happening in sync with it.
Still not sure if you should be concerned? Here are some green flag (good scenarios) and red flag (layoff scenarios) where you could be asked to provide more documentation:
Green flag: Leadership wants to better document processes as objectives for the year across the company, you lack any documentation for certain processes, or new software has been introduced to allow for better documentation.
Red flag: Consulting firms are meeting with your specific team to understand your processes and documents. Executive teams have become highly engaged in understanding what you and your team members do. Time tracking is instituted with a large emphasis on tracking how much of your time is revenue producing work.
Political policies are being enacted that directly affect your industry
While this one is very geared toward the American workforce with the introduction of so many new tariffs in 2025, tariffs are not the only signal that changes might be coming to your company. Did the FDA not approve a product your company was banking to release this year? Maybe CMS introduced new regulations that will require much more operational expenses to your health organization than they were budgeting for? Keeping aware of how changes in the political landscape are affecting your company can help you keep a step ahead if a career change might be necessary.
Your company has had layoffs previously
When a company has its first layoff, it's kind of like opening Pandora's Box. Pandora's Box was an ancient box that once opened the entire world was now subject to suffering and strife where the world had previously had peace. The same goes for layoffs. Once that trigger has been pulled most employees will now always be in fear of it happening again and will have concerns about their job security. In fact it takes roughly two years for employees engagement work to return to pre-layoff levels once one has happened.
Since trust is already lost with the employees, companies feel that there is less harm in repeating the action as damage to morale is already done. Nevermind that all of the remaining employees will be dealing with anxiety, survivor guilt, and low self-esteem in addition to the low morale. Anything in the name of profit, am I right?
You notice a cultural shift happening from the executive team
If you are in a management position this one might be easier to understand the nuance of, but big changes in your executive team usually means that there are big changes coming to your organization. Many times this comes about by a new President, CTO, or other upper-level executive coming in. Usually this executive has their own vision of how they want the company to operate.
Do your best to listen to how new executives present initiatives to your team or what their goals are for the near term and short terms. If you have a good relationship with any other executives at your company, ask them for their impression of the new leadership (that is, if Sign 13 isn't already happening...)
You have recently opened an offshore office or some team's operations have moved abroad
This one might as well be a red flag being waved in front of your face saying “Danger”. The only reason a company ever moves teams offshore is because they believe there are roles being done domestically that can be done cheaper. I have worked at companies where upon opening the office the message was “Offshore is just to help you, not take your job from you!”. That lasted a year and a half before the first team was let go for the work to be offshore.
Do not fall for any company propaganda saying this change will have no effect on your job. Sadly in this day and age if a company feels they can get the work done for cheaper they are going to go that route regardless of the quality of work you put out. An offshore team being opened is usually the signal that job turbulence is about to increase at your work.
The company is in the news... and not for good reasons
Bad PR isn’t just a bad look for a company, it’s almost always a financial hit as well. Companies like Crowdstrike and Boeing will tell you that once your goodwill is gone with the public, it’s hard to get back. That lack of trust can affect a company's revenue in the short term. While you may not see immediate after effects of bad press for your company, be reviewing your company's quarterly results to see if revenue and client retention is trending down.
Hiring has been put on pause, or the company is only hiring for offshore positions
Companies that have switched gears from wanting growth to concern about overall operational costs usually signifies concerns about the long term financial strategy of the company. Usually a hiring freeze is instituted in hopes that the company does not have to have to go through layoffs to help the balance sheet or that only hiring from a cheaper labor population will allow productivity to remain steady without spending money.
Hiring freezes can go on for a very long time (I have worked at a company with a 5 year hiring freeze before…) and can hinder your career growth if they also coincide with no promotions for current workers. Hiring freezes may be survivable but they can be frustrating to have to manage in your current role.
You (or people you know) are being placed on PIPs unexpectedly
PIPs should never be used as a vehicle to remove employees that are executing all functions of their job, but the reality can be something quite different. If you are noticing that management is putting stricter requirements on your team’s job performance that don’t seem in line with your work they may be using a PIP as a way to remove your specific team and others without a mass layoff.
Document the changes being asked of you and work diligently to meet the requirements of the PIP in these cases. If you follow the actions set forth by the PIP they are going to have less legal standing to remove you and it will allow you more time to find a new job. That doesn’t mean that you won’t be removed from re-structuring in your company but at least you won’t be removed for performance reasons.
There has been a mass exodus of executives in a short period of time
Have you ever had an executive that seemed to love the company and was so enthusiastic about the work just up and leave one day? Same. But this isn’t that surprising in cases where there has been a shift from the established culture of the company.
If you see many executives leave at once (especially in one organization) that is a sure-fire sign that a new higher executive has taken over and did not feel these leaders were a fit for how they wanted to run their organization. Or the executives have voluntarily chosen to find new careers as they did not like the direction that the new executive was taking. Usually in these cases you will also see the new executive start to bring in their own team of people they have worked with previously that they know will execute their vision. While this may not mean layoffs, it does mean that big changes are likely to come to your work and usually a cultural shift is about to begin.
Technological advancements are being pursued for efficiency (AI)
If you work in tech in the year 2025 you are probably so sick of the phrase "AI" at work that you just want to skip this section. But if you don't know already, AI is the new buzzword for work optimization that all companies are pursuing to both look technologically advanced compared to the competition and to bring down their operating costs.
If you work with the actual AI implementations like I do you may know that the gap between what AI can do and what the corporate executive teams and their shareholders expect them to do is a pretty wide gap. But regardless of what AI is capable of at this point, companies are laying off people with the expectation that AI can replace them.
Even if you work in a highly specialized field that requires a lot of critical thinking an executive team may still think that LLMs can do your job as well as you can. You can't be saved if they ultimately decide to go for it, but you may get re-hired once they realize they made a mistake.
The company is removing or lowering benefits
Benefits in this case can mean many different things. It may just be that snacks are no longer going to be free in the breakroom or that office lunches are going away. It could be something bigger like your health insurance premiums skyrocketing since the company has moved to a less comprehensive plan. In any case these can be signals of economizing moves that the company is taking to lessen their financial burden and can be a sign of the company’s overall financial health.
Have a friend in HR? While they may not be able to share things about impending layoffs they may be able to provide some insight into why some of these benefits changes are taking place and how much of the decision is a cost-cutting move.
Your boss's demeanor or attitude has changed
This is another “could be nothing, could be something” clue. If your manager seems much more distant than previously or is showing less interest in helping you achieve your goals for the year, it may be because they know that the effort won’t be worth it soon. But this one could just as easily be caused by stressful family, financial, or relationship situations outside of work. A change in boss’s behavior plus many of the other clues discussed on this page is more likely to be from potential layoffs than a change in boss’s behavior alone.
If you have a close relationship with your boss and you start noticing them exhibiting stressful behaviors that could be coming from either corporate or personal life, ask if there is anything going on with work that you can help with since you notice they seem to have a lot going on. Let that be the introduction into opening a line of communication to find out if their stress is more from work or other external factors.
You hear lots of layoff talk during gossip and happy hours
Probably the first time in your life you have ever been told to trust a rumor! But in this case information might be circling that isn’t supposed to be widely spread throughout the company. It just takes one person with loose lips to spread the word that something is happening and have it spread like wildfire.
If you hear from sources across multiple teams and parts of the company, chances are that there is a big initiative behind the scenes to cut costs. Get your resume ready just in case that happens.
While these are the most common signs that you will see, companies are always inventing new ways to bring unemployment to your doorstep (like the unhinged Better.com CEO). The only thing anyone knows for certain is that layoffs are always coming in this day and age and it's in your best interest to always be prepared if they do.
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