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Companies can either thrive or falter under the constraints of capitalism, especially during an economically devastating global health crisis that was only a short decade after the 2009 recession.

There are a few signs that can tell you when a company is on its last leg. Sometimes they can limp along for a few more years, but it might not be a bad idea to dust off that good, old resume.


We went to Ask Reddit to hear about those red flags and hopefully we can learn a few things from these horror stories.

Redditor Lofi_While_I_Sleep asked:

"What's a sign that the company you're working for is on its death strokes?"

Here's how you catch the signs so you know when to get out.

What comes before lay-offs?

"Having been through this, they start stripping benefits. Then comes the employee reductions and wage freezes. CEO leaves."

- dontgoforthe1

"As somebody who's been involved at a senior leadership level and had to execute lay-offs/reductions/downsizing, I'll add this; there are markers that come way before it gets to employee cuts. First it comes from top-down communications that start to talk about declining revenue or profit. Then, when senior leadership starts talking about saving, you know 'tightening the belt' it's a sign that leaders are thinking about how to cut spending, but that in it of itself doesn't mean a RIF (reduction in force)."

"The real thing to look out for is if leadership is talking about reducing cost but at the same time are not communicating a vision for innovating or changing the business model in a significant way. If their plan is to save money while doing exactly the same thing then this is the biggest red flag. A company rarely saves its way to profitability without innovating and generating new value to offset the decline. Penny pinching essentially just slows the decline and delays the inevitable."

- Z0MBGiEF

"Well said. My company implemented TPS (Lean) even in office processes before dropping the hammer."

- dontgoforthe1

"Pretty futile, it might buy some time but if your market share is on the decline and the company's products are not really that competitive anymore (and ownership/leadership isn't innovating/pivoting), than no amount of Black-Belt Six Sigma Consultant stuff is going to turn a dying business around. It's like trying to save yourself by going on life support when you really need a heart transplant. It's only a matter of time."

- Z0MBGiEF

"In a similar vein, be on the alert for what might be termed 'musical chairs' behavior among lower and middle management: blame is going to land somewhere and so each little team leader and department head scrambles to cover their a**."

" If you don't have the vantage to see that dynamic firsthand, then be on the lookout for nonsensical expectations, which get followed by different pie in the sky initiatives that seem to be at cross purposes with the last set of orders (which were never really rescinded). Meanwhile your boss looks stressed and dodges questions when asked for clarification. Maybe the boss mutters this place is so f*cked up."

"That's the time to look for other opportunities, before the axes start to fall."

- doublestitch

The "everything's fine" meeting.

"When management calls an all-hands meeting, to assure the employees that everything's fine."

- pullin2

"Sh*t, we have one of those planned for Friday."

- 47-Rambaldi

"Time to update the resume."

- azriel777

We're a family!

"We are PARTNERING with a bigger competitor firm. We will stay a FAMILY and NOBODY is GOING ANYWHERE."

"Means you got bought out and everyone is getting laid off as soon as they have control of your business."

- TehSausBaus

"Yep, 'merger' usually just means 'acquisition' and their ways imposed on you."

"Happened near me when two hospitals 'merged' with the usual puff of management and PR bullsh*t. All that happened was a load of Hospital A's outpatient clinics started closing and moved to Hospital B. Hospital A was the only hospital for 25-30 miles around and people were also travelling long distances from rural areas to get there in the first place, now they're expected to do another 20 miles south to Hospital B. Woohoo."

- _spookyvision_

"Happened to me. It was announced as a merger but it was an acquisition. Six months later our management was walked out the door. We were placed under new managers who then stripped our responsibilities and our access."

- TheDeadGunslinger

"You forgot the cheerful chatter about 'synergies!' How could you possibly forget about how the merger is going to make everything so much better because of all the new opportunities for 'synergies'????"

- theartfulcodger

"Lol. I went to this meeting the #2 said he was taking a pay cut. One of the research drs raised his hand and asked if it would help if we all took a pay cut. Every head turned and gave him a death glare."

- Myfourcats1

"In that moment I would be contemplating a 100% pay cut... By updating my resume and passing it on the the competition. See I can be a team player too, once hired I just saved my old company some cash by not having to pay me anymore."

- CylonsInAPolicebox

A tale of merging.

"I once worked for a company that rented medical equipment like pulse oximeters and defibrillators to hospitals across the US. Branch offices in every major city. I worked in IT, helping to run the mainframe. This was the late 1980s/early 1990s, and desktop PCs at the office were just becoming a thing."

"Anyway, we were extremely leveraged and one Saturday my boss calls me at home and asks me to write a massive report basically summarizing the total sales of every branch office, by hospital, in descending order of revenue. For the last five years."

"To put that in context, the physical output of such a report ended up being a stack of wide-carriage pin-fed computer paper that came up to my waist."

"I'm six-two."

"I knew this when I took the call and closed my eyes and said to my boss, 'We're being bought, aren't we?'"

"He swore me to secrecy."

"About 300 people worked at that HQ. We were informed we were losing our jobs by... [drum roll please] ... a voice mail."

"We came back from lunch on Friday to a company-wide VM telling us we were 'merging' with our next largest competitor. Of the 300 people in that office, maybe six got jobs with the merging company."

- dramboxf

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Pinching pennies.

"A really subtle one is when Purchasing suddenly starts thrashing around looking for 'new' vendors for basic things like copier paper, pens, staples, sh*t like that. That means they've burned their existing vendors by not being able to pay bills. I've seen it happen at least twice. Both companies ceased to exist within 12 months."

- dramboxf

"Could also be a sign they're trying to pinch pennies on office supplies. If how much you're paying for a ream of paper matters for your company, you're probably in trouble."

- 00zau

"Light bulbs are different colors or brightness. When the maintenance department is using lightbulbs that are a different color temperature of the existing lights it is because someone isn't paying attention or because they are using old stock and not re-lamping whole zones at a time due to inventory or labor constraints."

- hippybiker

"This is especially true of retail stores. Once the regular vendors start demanding cash on delivery, well-known names start disappearing off shelves, and they are being replaced with Chinese knockoffs called 'La Croisiet,' 'Bakemister' and 'Cuisine Art,' well…springing for the store warranty on your blender is an even dumber idea than usual."

- theartfulcodger

Employees have to get paid.

"I'll add my own. We've been on paper checks for 6 pay cycles because ADP (our payroll software) is too expensive. Getting out asap."

- Lofi_While_I_Sleep

"Yeah, that's probably a sign that you're gonna bounce that check soon."

- 00zau

"Yeah I once worked for a company where the CEO had previously gotten in trouble with a state board of labor for not paying out employee wages after going under. Shame I didn't find that gigantic red flag before I took the job, because they went from aggressively building a software team to firing all of their engineers in like 8 months."

- hurrdurrsocrates

There's a lot of signs.

One Redditor had a whole list.

"From my experience:"

  • "Long time employees are forced in to retiring"
  • "Management is constantly fighting each other"
  • "Good employees quit without cause"
  • "Company is behind on their payables or they're scrambling to find new vendors"
  • "A LOT of closed door meetings between management"
  • "Consultants are brought in"
  • "Hours are cut"
  • "Benefits are cut"
  • "Wage freeze"
"This is really bad news for my employer, which is a state."

"I was going to mention the consultant thing. Its a sign to watch for when there are other concerns. Obviously consultants can be used for a whole host of things, but when its a last ditch effort to overhaul the organization, you're on thin ice."

- dr_freudenstein

"And to add:"

  • "Promotions are frozen along with wages"
  • "Older employees are laid off with a huge push for bringing in college students that they can pay much less"
  • "Janitorial and coffee services are cut down"
  • "Bathrooms are migrated to one ply toilet paper"
  • "In-house jobs are shipped off to contracting companies or overseas"

"When the top level management, right under senior management are replaced with management consultants. Been working in corporate USA for over 30 years, all they do is sow fear, uncertainty, and doubt about the current staff, try to stay as long as they can to suck the company dry."

"Our consultants were from Accenture at my last company, yes the same company that worked for Enron."

- MadLintElf

Positions aren't being filled.

"No positions are being filled when people quit. Delaying of pay. Silence of management. Key people leaving the company."

- Tired_of_yer_ish

"At my former employer HR would hassle you into interviewing and hiring absolutely useless internal candidates just because they had applied. You have told us you want a role opened, so you will fill it."

"And if it went on long enough unfilled, or someone else had 'held the fort' for long enough, HR decided you didn't need that extra body and pulled the post. Therefore you could hire nobody and anyone holding the fort had to continue doing so."

- _spookyvision_

"Saying we are overstaffed and not hiring newcomers when everyone is doing 3 people's job and the workload is out of hand."

- Lord-AG

If you're working on commission.

"If you're in sales and they start messing with the commission structure every couple months, that's a pretty big sign. Especially if they start doing stuff like, 'If you sell $x of accessories on a ticket, then your commission rate changes to this other arbitrary number.'"

- ashok36

"That's a clear sign to bounce. Messing with pay is a deal breaker. Not necessarily a sign of the end of the company though, sometimes it's undervalued sales team by a greedy management. Or if the company suddenly thinks the stuff will 'sell itself.'"

- Odd_Grapefruit_5587

Not trusting the movement towards digital.

"Micromanagement, lack of vision, 20th century strategy, distrust of digital. Going through this right now."

- Toygr

"I'm in the Midwest and I see the 'distrust of digital' far too often. If company leaders are simply unfamiliar with a lot of digital tools and resources out there that's one thing (that's how I get hired), but if they're full-on against making use of digital tools and resources that's when you walk away because they are on a downhill spire."

- Gorssky

If any of these things are happening at your work place, it might be time to start checking out LinkedIn and Indeed.com.

This is a strange time for job hunting as record numbers of workers are quitting. It's up to you when you want to jump ship, but make sure you're keeping your eye out for those red flags.

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