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Signs Your Company Is Going Under

by Ossiana Tepfenhart 5 years ago in list / business
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If you're wise, you'll watch for signs your company is going under.

There's already a lot of talk about the upcoming recession—it's really unavoidable, and if you're like many people, it's a terrifying thought to have.

People are worried that they won't keep their jobs, and that there will be a chance that the company they worked for years at will just tank in the rough economy. That's why many employees are now brushing up on signs of a company struggling with the economic times.

Worried about seeing a layoff in your future? Watch out for the following signs your company is going under.

The mood turned dark and tense at the office.

Humans are empathic creatures, and that means that we often can rely on instinct to determine whether or not someone is really feeling well. Most people can feel when something isn't right in the pit of their stomach.

When things are rosy inside a company, you can often tell. People are generally relaxed when they have some semblance of job security. They'll joke more, their smiles will seem more natural, and they will feel more confident in their steps.

Meanwhile, one of the more intuitive signs your company is going under relies in the tension in the office. Do the higher managers seem tense? Are their smiles forced? Are your coworkers acting busier than usual, or just looking anxious?

If you see a lot of tension, you might want to start putting résumés into other companies. There's a good chance that you will not keep your job due to a financial reason.

You overhear upper management talk about cash flow in a hushed manner.

When upper management has a good cash flow, they will often boast about it. They will be jolly and may even brag if they had a hand in it. The exact opposite tends to be true if the cash flow of the business isn't faring well.

Generally speaking, business management will get very hush-hush if the company is veering into financial collapse. This is often done because they don't want employees to panic, or worse, leave before they can find cheaper replacements.

You notice that your coworkers just got a lot younger and a lot less experienced.

When a company is really under dire financial straits, they will do whatever they can to start cutting corners. Therefore, one of the biggest signs your company is going under is when they start replacing older, competent people with younger people, interns, and newbies to the field.

Since people with less experience tend to get lower wages, it's an easy way to curb costs. Of course, another sign your company isn't faring well is when they start having mass layoffs in order to get the newer kids in. Either way, if you see this happening, the writing is on the wall and it's time to get out.

All your upper management has decided to leave or "retire."

Most people tend to ignore the habits of those around them, and that's actually a fairly foolish mistake. One of the subtler signs that your company is going under can be witnessed in how management is behaving.

More specifically, you can tell whether or not your company's about to go bankrupt by how many managers are choosing to leave.

The reason why this is the case is fairly simple. When a company is about to tank, managers are usually the first to know. This means that they will often be the first ones to start leaving the company, primarily because they know what will happen if they stick around.

If you notice that a lot of longtime managers are no longer working for your company, you may want to follow suit. Something isn't going well with your company, and if many people are bailing, it could mean this is the end.

They stopped hiring people.

When a company is thriving, there's a good chance that they will either want to hire people or will want to see if there's new talent who can contribute. The opposite also holds true when a company is suffering financial losses.

Statistically speaking, most companies that are about to tank will have a hiring freeze before they go under. If your HR announces that there's a hiring freeze and that they are no longer promoting people, then you just saw some pretty clear signs your company is going under.

You're seeing layoff after layoff happen.

Layoffs are never a good thing. Healthy companies don't lay people off. Of all the signs your company is going under, this is by far one of the most grim. Usually, when layoffs start happening, the company's about to enter a death spiral.

Generally, layoffs will happen under one of two euphemisms. If you hear about your company "restructuring" or if you hear about "downsizing," it's often an indicator that the company in question is about to declare bankruptcy.

You've noticed an uptick in closed door meetings.

Most companies that are in good health do not hold closed door meetings unless they're working on a brand new, super-secret project that could potentially net millions. Those kinds of meetings are incredibly rare.

That rarity is compounded by the fact that most bosses never want to close their doors with employees inside because of the potential for sexual harassment suits. Simply put, in most cases, closed door meetings just don't really happen.

If you notice closed door meetings, or occasions where people slam the door shut as you're walking by their office, you need to get worried. When these kinds of meetings happen, it's often because emotions are running high and managers don't want others to know what's going on.

Closed door meetings are often one of the earliest signs that your company is going under—and it's a sign that usually appears right before layoffs start to happen.

Money for luxuries has run out, and company owners are asking people to work on furlough.

Cash flow is crucial to any company's well being. Without cash coming in, there's no way for a business to run. Most businesses will do what they can to try to salvage everything to the last drop—and that means they'll cut every little cost they can.

If you notice that the company in question no longer has money to cover pay raises, coffee, or other employee perks, you should start to brush up your résumé just in case.

If you hear that the company's management has asked people to take pay docks or even work for free to keep their position, then you don't need to look for any more signs your company is going under. Should this happen, the company already has one foot in the grave and it's only a matter of time before it bottoms out.

The company's stock is in free fall.

Nothing quite says it's the end times like seeing a company's stock plummet more than 75 percent in a matter of months. If you notice major investment groups and managers selling off shares like hotcakes, you need to follow suit and find a new job.

This is one of the perks of working for a public company that private companies simply don't have.

If your company is publicly traded, then you can use it to watch for signs your company is going under. More often than not, a company's stock will fall before things start becoming evident in the office itself.

Sales are worryingly low.

Without sales, you can't really have a company. It's just that simple. Therefore, one of the clearest signs your company is going under happens when you don't have enough clients to make ends meet. If no one is paying for your company's services or goods, there's no way that your company can keep paying everyone's bills.

If you can't remember the last time you spoke to a new client, or if you find that your company is struggling to close the deal, it's a sign something is very, very wrong. Should the trend continue for a long time, this will end up being the reason your company will shutter its doors.

You're getting notifications for company-wide meetings out of the blue.

Some corporate cultures really do like the idea of working on an "open floor" policy. Others don't. If you're working in a company where company-wide meetings aren't the norm, then you should start to get very concerned if these meetings start happening regularly—or at all, really.

Managers often will use company-wide meetings as an opportunity to break bad news to you. However, they also could be used to instill a new form of company culture, so it really depends on what the messages are.

If you notice that the company-wide meetings are pep talks that insinuate that "things will be a little rough," then you can definitely count this as one of the signs your company is going under. People don't have pre-emptive pep talks unless things are getting really awful.

On the other hand, if you hear that your company-wide meetings are just about the share price, the company morale, or accomplishments of coworkers, you might not be in such hot water.

Your responsibilities are loading up or slowing down.

Two major signs your company is going under both fall under the same boat: responsibility shifts.

If you notice that you're now doing multiple people's work, chances are that they are downsizing and loading up all remaining employees with the work that needs to be done. This is a terrible business decision, and it's one that typically kicks off "the downward spiral" into bankruptcy.

If you notice that your responsibilities have slowed down, then you're in really bad shape. This means that the management has been relieving you of your duties, and are about to lay YOU off.

They've brought in outside experts to "help with management" or "help with costs."

Beware the new "consultants" that drop by your company—especially if your manager has announced that they're here to "offer perspective on management."

What's really happening is that the company probably hired lawyers, consultants, and restructuring experts in a last bid to try to salvage the company. More often than not, this will be punctuated with sudden layoffs, selling of company assets, or even a declaration of bankruptcy.

If you notice a lot of strangers taking notes on how you do work, it's clear you're seeing plenty of signs your company is going under soon. This might not be the first sign you'll see, but it definitely won't be the last.

All the best employees left.

Aesop was right to warn people not to kill the goose that laid the golden egg. When the best employees all bail from a company, that company's chances of survival rapidly shrinks. A failing infrastructure is a top reason good employees quit otherwise seemingly good jobs. Replacing a top employee, especially one that really poured their soul into the company, is extremely difficult to do.

Should this happen in rapid succession, you should be very worried. Every single time you notice a key player in your company pack up and go, you need to regard that as one of the more ominous signs your company is going under. After all, companies can't survive in today's climate without great employees.


About the author

Ossiana Tepfenhart

Ossiana Tepfenhart is a writer based out of New Jersey. This is her work account. She loves gifts and tips, so if you like something, tip her!

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