4 Signs That You Are Working for a Failing Company [Updated]

Are You Working for a Failing Company?

I have multiple clients who currently work for failing companies.

These companies fall into a variety of industries:

High Technology
Pharmaceutical
Telecommunications
Oil and Gas

Each of them has worked for these companies for many years. Do they see the signs that the businesses are failing?

Well…they see it, but it is easier to bury their head in the sand than to admit they really need to get out!

This is a very dangerous strategy given the acceleration of creative destruction that is blowing through whole industries.

So, what are the signs?

Note: This post was originally published in February of 2015 and was updated in April of 2018.

Repetitive Layoffs, RIF, Resource Action, or Redundancy

I have one client who works for a major pharmaceutical company. The building is starting to look like a cemetery—hardly a living being there. When there are more open desks than filled, that is a sure sign that you are working for a failing business.

How many times have I heard, I made it through the last layoff – I am safe!

When a company is downsizing there are several factors in how they do it. First, they will eliminate contract labor, that is easy. Next, they will start preparing to layoff staff in different locations and/or geographies. It is much easier to lay off staff in the U.S. than in Europe and it is easier to lay off employees in right-to-work states. Some states have thresholds on the size of the layoff. If they do not exceed that threshold, they do not need to report the layoff to the state.

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Depending on your location it will affect the timing of the layoff. Do not think because you were not laid off but someone else was at a different location means you are safe.

No, it is not if you get laid off, but when.

This may well be a sign of a failing company!

Circling of the Wagons

This can typically be seen in upper-level management, where the old guard circles the wagons and protect their own. One symptom I have been seeing is bright up and coming women being pushed out by older, more established men. You might call this the return of the “good old boy” network.

This usually happens before a major layoff. Upper management starts to maneuver themselves into prime positions before they screw everyone else.

We have seen this multiple times in the tech industry with their male bias in hiring. You might want to check out Bloomberg’s Decrypted podcast April 14th, 2018 episode called A Female Engineer’s Fight for Equal Pay at Google.

This may well be a sign of a failing company!

Generous Pension Buyout Offers

I’ve had many clients who have been offered lucrative pension buyout offers. They are “take it or leave it” offers, with the requirement that they retire. Most of these clients have been at their companies 30+ years, and are not in a position to retire (with children heading off to college, a spouse with health issues, other mitigating factors, etc.).

They tell me, “If I can last just five more years…” Their response is almost entirely based on fear of the unknown. These are not times to make decisions solely based on your emotion.

But beware—these offers expire quickly and will never be offered again. I tell them, “They want you gone! Figure out how to make it work!”

You really need to seek outside financial advice. If you do not have a financial advisor, I suggest you find a fee-based advisor who can give you a third-party viewpoint.

This reminds me of 1999 when IBM converted my pension to a cash balance plan and then switched it back for everyone who was over forty years of age. Oh yeah, minus a whole bunch of perks—like health insurance. A former boss of mine said:

They took it away and gave it back, they would never do that again.

IBM stopped funding the pension in 2008. I left in 2000 with a lump sum pension payout. In hindsight, it was the best financial move I ever made! The individual who replaced me at IBM was better at the position than I was and he was laid off 3 years later. I dodged the bullet.

This may well be a sign of a failing company!

Management Bad Behavior

Have you seen bullying behavior? Have your manager’s emails become more and terser? Do you feel like you are being shouted at in e-mails?

These are all signs of stress in the workplace. When a business is failing and in a tailspin, there is more work to be done by the few that are left. Stress levels increase exponentially. This brings out the worst behavior.

We all saw this during the great recession. When things were spiraling down management bad behavior became rampant.

This may well be a sign of a failing company!