Can you tell if your company is about to make redundancies?

Lydia Smith
·Writer, Yahoo Finance UK
·5-min read
Young people with face masks back at work in office after coronavirus quarantine and lockdown, walking.
While regular cost-cutting is normal and good practice for businesses, sudden cost-cutting that impacts people’s abilities to do their jobs can be a signal of difficult times to come. Photo: Getty

Although COVID-19 restrictions are beginning to ease, the pandemic has already irreversibly damaged many industries and businesses. Millions of people across the UK have lost their incomes, been furloughed or faced redundancy as companies struggle in the pandemic.

Job security is a concern for most workers, but particularly at the moment. A year of economic turmoil has left the number of people on company payrolls down 693,000 compared with before the pandemic struck, with workers under 25 accounting for 60% of job losses in the past year.

Whether your company is about to make job cuts can be obvious, particularly if you are aware that the organisation has been struggling financially for a while. However, the warning signs can be more subtle, too. You might hear rumours about difficulties within your firm, or experience a gut feeling that something is wrong.

While redundancy might be inevitable for your current role, spotting the signs of it can help to prepare you for when the time comes. So how can you tell if job cuts may be on the horizon — and what can you do about it?

“Employers should be cautious about how they approach the issue of redundancies if they are thinking about taking this step. It should be kept in mind that employees who are already on edge during the pandemic might interpret their employer’s actions, however innocent, as possibly leading to the worst-case scenario,” says Alan Price, CEO of BrightHR.

“For example, if employees have been furloughed for months and are then asked to return to work, they see management having regular meetings, not giving bonuses, freezing pay increases, halting recruitment, red flags may be raised in an employee’s mind.”

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Sometimes, a freeze on recruitment can be a sign a company is experiencing financial difficulties. Although some roles may take longer to fill, vacancies for extended periods may be a sign that redundancies may be on the cards, albeit not in the immediate future.

Cost-cutting measures can also be a sign of impending job cuts. While regular cost-cutting is normal and good practice for businesses, sudden cost-cutting that impacts people’s abilities to do their jobs can be a signal of difficult times to come.

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In addition, when there’s talk of a merger or acquisition, an overlap in job roles or responsibilities in the two companies could be a sign that layoffs are coming to your team.

Senior leaders or managers in your company may quit before being made redundant because they are more aware of just how severe the situation is.

Finally, if you seem to be getting fewer responsibilities or being excluded from information, it may be a sign that your role is being cut. Being alert for secretive conversations among management can help you determine whether your job may be at risk — and give you time to prepare.

However, Price says inadvertently spreading gossip is something employers should be aware of. “The most likely thing that an employee will do is speak about it with other members of staff,” he says.

“Employers must dissuade gossiping as much as possible by creating an open-door policy for such matters. The best way to dispel a rumour is to be ahead of it, so employers may also want to consider speaking with staff about any redundancy plans to avoid false narratives being spun in with what may be some truth.”

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Spotting some of these clues does not mean your job is definitely on the line. However, if you do think you might be facing redundancy, there are several steps you can take to prepare yourself.

If you are worried about being made redundant, make sure to check your employment contract, which will let you know what your rights are regarding pay and notice. You can work out how much redundancy pay you might get by visiting the Direct.gov website. In the UK, you’ll normally be entitled to statutory redundancy pay if you’re an employee and you’ve been working for your current employer for two years or more.

It is also worth looking around for other employment, polishing your CV and sending out applications, as research has shown that it is easier to get a new job while you still have one. In 2017, economists from Columbia University and the Federal Reserve banks of New York and Chicago examined the job-seeking activities of 2,900 people aged 18 to 64, except for the self- employed. Those who were still employed were four times more likely to receive a response rate from employers than unemployed applicants.

According to Price, speaking to your boss if you are concerned about being made redundant can be a good thing and put your mind at ease. Moreover, it’s likely that their reaction will give you the information you need either way.

“Encouraging staff to come forward with their questions may contribute to dispelling some untrue rumours,” he says. “In such meetings, employers should be honest as much as possible about the company’s position, and see this as a warning sign that staff are worried and take the necessary steps to mitigate the situation.”

Watch: How To Resign Without Burning Bridges

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