How To Tell If You Are Going To Get Laid Off

Man gets laid off from work

If you've ever been employed at a typical company in corporate America, you know that layoffs are a common phenomenon. How does a company decide who stays and who goes? How do you know if you're going to get laid off or not? These are important questions you should be asking as an employee, and I can answer them.

It's All About ROI

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When a company is restructuring, they're given an amount of money to cut. And one of the easiest and fastest ways to do that is to decrease the number of employees at the company.

The company figures out the value of each employee, the return on investment (ROI), and decides to lay off the employees who don't provide the most value, who don't give the company a desirable ROI.

For example, if a company pays you $10 an hour, it actually costs them $13 to $14 an hour to employ you because there are taxes and other things they have to pay on top of your salary. Then, they ask, "Who is saving or making us more than enough money to justify their cost?"

Now, in a situation where there are multiple employees creating the same value, they ask, "Who is the easiest to get along with?" Personality starts to play a role in the decision, but also aptitude. "Who's going to be able to adapt when we have less staff and we have to do more with less?"

ROI, personality, and aptitude are considered when a company is deciding who to lay off.

How To Avoid Getting Laid Off

Woman on laptop at work avoids getting laid off


If you want to avoid being cut, you first have to get clear on your value. Can you articulate how you are saving and making your employer enough money to justify the cost of employing you?

Sit down and have a conversation with your boss about it. See what you can do to make sure that you're creating that value and if you can create additional value on the job.

Sometimes people will come to me and say, "I've had perfect performance reviews year after year and got laid off." Yes, because it's not about your past performance. It's about the value you're creating and where they can make cuts. It always comes down to your current value as an employee. If you want to avoid getting laid off, remember this simple fact.

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