Yes, the jobs report was OK, but it fell short of expectations with the economy adding 155,000 new nonfarm jobs in November. Economists surveyed by Dow Jones had been expecting payroll growth of 198,000 and the jobless rate to hold steady. The numbers could be a red flag. With the expansion now twice as long as the normal post-World War II recovery, and with worries about trade and interest rates ebbing and flowing sometimes by the hour, it’s time for a reminder — your job could still be at risk.
General Motors and its 15,000 layoffs last week are only one example, says Andrew Challenger, vice president of Challenger, Gray & Christmas, the Chicago outplacement firm whose monthly surveys of corporate layoffs are closely watched. Unemployment-insurance claims for newly-fired workers hit a six-month high in late November, and Challenger says layoffs at the larger companies it tracks are nearing 500,000 year through November, with big names like Verizon Communications and the bankrupt toy chain Toys-R-Us making cuts.
All the more reason to mind a job-market truism: Even with the unemployment rate remaining steady at 3.7 percent, its lowest since 1969, it can still happen to you.
« In this economy, we’ve still seen a number of enormous, bellwether companies, in industries where there’s disruption, making cuts when the economy is booming, » Challenger said.
It’s smart to know the warning signs of a coming layoff even when times are good, said Scott Dobroski, community expert at job-search site Glassdoor.com. They might help keep you off the list when the cuts come, or position you to land quickly if they do. It is, after all, still a good economy, without a full-blown slowdown or recession on the horizon yet. Expert advice is pretty similar from study to study, and recent headlines bolster many of them.
« The common theme is, knowledge is power when it comes to your job security, » he said.
Sound obvious? Maybe it is. But this is something workers in many parts of General Electric may wish they’d paid more attention to. More than half of workers toil for the 0.4 percent of companies that have 500 or more workers, and many of them are publicly traded, according to the Tax Foundation.
General Electric said last month it will lay off 150 workers in Jacksonville, Fla. and another 63 in Wisconsin, as executives scramble to restructure a company that has underperformed the market for more than a decade. One trigger: The company missed analysts’ third-quarter earnings estimates by 30 percent, but that was just the latest in a series of bobbles that have even claimed the jobs of GE’s last two chief executives. Also, don’t just watch how much your company is earning. Watch its forecasts for signs of weakness down the road.
Even at smaller companies, there are communications you can watch, Dobroski said. Don’t skip the company all-hands meeting, or fail to read e-mails that might have at least general information about how the firm is doing, he said.
Even in a strong job market, there are sectors and companies having cyclical troubles, said Jim O’Sullivan, chief U.S. economist for High Frequency Economics. Right now, jobs related to housing construction could come under pressure as interest rates rise and housing demand stagnates. And President Trump’s trade battles could lead to job losses in manufacturing, O’Sullivan said.
Challenger points here to Verizon, which just offered buyouts to more than 44,000 workers, and transferred thousands more to newly-hired outsourcing company Infosys, as part of a drive to cut $10 billion in costs. One reason for those cost pressures is the company’s need to pour billions into a 5G wireless network, and of course there are ongoing disruptions of Verizon’s landline telecom businesses and its TV-distribution service. Buyouts like Verizon’s in good times can be a sign of likely layoffs when the economy slows, he says, and a reason to take the money while a new job is easier to get.
And the granddaddy of disruption in today’s economy is still the retail sector, buffeted by the sustained rise of e-commerce, he said. « That’s been true for years, » but companies are still closing physical stores to focus more on the Internet, Challenger said.
This is the lesson for GM workers, many of whom were taken by surprise because the company overall has been doing well, at least until Washington slapped tariffs on imported aluminum and steel that will cost GM an estimated $1 billion this year.
The problem was that the overall picture obscured a sharp drop-off in sales of sedans, including the Chevrolet Cruze sedans assembled at the Lordstown, Ohio plant GE plans to « unallocate » next year. Cruze unit sales are down 26 percent this year, and sales of Chevrolet’s bigger Impala sedan, also hit by layoffs, are down 13 percent.
People who make those products are going to be on the street, notwithstanding GM’s 50 percent-plus stock climb from early 2016 until this June.
« If I’m a GM competitor working on a similar product, I want to do my homework and read beneath the headlines, » Dobroski said.
Just because the higher-ups say the deals won’t force layoffs won’t necessarily make it so. Look at Toys-R-Us, whose bankruptcy and mass layoffs announced in May resulted from a leveraged buyout begun with the best intentions and the full expectation that management would make a pile of money, Challenger said.
Global merger and acquisition activity is at all-time record levels this year, the Financial Times reported in September. Some of those deals inevitably will lead to too much debt, with deals in the especially-busy energy sector likely to be hampered as well by lower oil prices as supplies surge. Even if the buyers don’t overborrow, they will often bring in new management, Challenger said.
« They’ll bring their own people, and those people will bring their own people, » he said.
if your company has just been through a merger , and especially if it has begun a buyout that adds debt, management will be under more pressure than ever to make numbers.
This can take myriad forms, Dobroski says. If there’s a new restriction on business travel, or just more attention to expense accounts, that can be a sign of initial pressure on profits that will lead to cuts later. (Increased attention to expense accounts can also be a sign that managers are looking to catch an employee in a lie to justify a dismissal, he adds).
Legally dubious though it may be, the presence of a lot of cheaper, younger talent in the office doing approximately what you do can be a sign of trouble. So is being asked to train new workers, who may be your replacements. And, just like when a worker is close to a firing for weak performance, being shunned by colleagues and bosses is a sign that other people may know something you don’t. Worst of all, if your work projects are being reassigned to others, it’s a sign that management may be getting ready to live without you, Dobroski says.
« When you’re left out of conversations it’s a worrying sign, » Challenger said.
Verizon is a key example here, having transferred thousands of workers to Infosys, where they will work with Indian staffers who are paid much less. Workers who are assigned to train cheaper workers should keep their eyes open and resumes ready, Challenger said.
Office gossip about layoffs can be rife with false positives , such as speculation about cuts that aren’t coming, but rarely misses signs of real trouble, says Dobroski.
If there are signs of trouble, there are things you can do to prepare. In theory, you can up your performance to make sure you’re not on the list, though, especially for higher-salaried workers, this isn’t always a winning strategy. You can begin copying work samples to thumb drives or e-mailing them to yourself in case you need a portfolio ready. You can begin networking in your industry even while you’re employed, so contacts you may need to reach out to will have heard from you recently. And you can begin showing your boss — with numbers, not adjectives — the contribution you make to your current team, Dobroski said.
« Don’t throw anyone under the bus, » he said. « Just use numbers. »
Two things to remember most of all.
One, it’s much easier to find a job while you still have one. So don’t ignore the signs.
And, perhaps, give a kind of perverse thanks if your company ran into trouble during a good job market. October’s unemployment report said the median jobless worker had been out of work for nine weeks, down from a peak of almost 11 weeks in the last recession.
—Tim Mullaney, special to CNBC.com