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What are the signs of an impending layoff in an organisation that can help an employee prepare themselves better?

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Senior Software Engineer at Grab6 months ago

Prepping for interviews always feels detrimental to actual career growth. At the same time, what are the things one should look out for to avoid getting laid off and jump ship when things are about to go south.

One advice mentioned often is to look for finances of the company, but I am not aware how to analyse it. Can you help with resources for the same?

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(3 comments)
  • Alex Chiou
    Robinhood, Meta, Course Hero, PayPal
    6 months ago

    The most obvious sign is the share price struggling. Grab is publicly traded, so that's something you can keep track of easily. It looks like it's not doing too well unfortunately (hope it gets better). 😔 Layoffs at Robinhood happened shortly after I left, and I'm sure it wouldn't have happened if the stock had remained at its IPO price of $40/share.

    That being said, here are other signs to look out for:

    • How managers are doing and re-org plans - This is one of the reasons it's so important to maintain a good relationship with your manager. If you have high trust, they may tell you (or give you a strong hint) before the layoffs are actually announced.
    • The news - I think layoffs have to be reported to the government, and sometimes news outlets will pick it up and report it.
    • Blind - As much as I hate to admit it, Blind has good information here sometimes. However, I've also heard of whiffs from the Blind community and rumors being false. Treat the information on Blind with a huge grain of salt.
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  • Alex Chiou
    Tech Lead @ Robinhood, Meta, Course Hero
    5 months ago

    In terms of how a software engineer can prepare themselves for layoffs, I highly recommend reading through this discussion here started by a Meta engineer (which is unfortunately a company where this topic is very relevant right now).

    In a nutshell, I think that unless you're >50% sure that layoffs are coming, I wouldn't stress out too much about it and just continue doing your best. Anxiety will worsen your performance on the job and ironically make you more likely to be cut during a layoff. From an IC perspective, layoffs are effectively random - There is no magic trick to drastically change your behavior and protect yourself from layoffs.

    Tactically speaking, here's why this is even more true in your situation:

    • Since you're a senior engineer, you are in a much better state than junior/mid-level engineers when it comes to layoffs as so much more of your job should actually translate to making you better at interviews.
    • In particular, if you are a high-performing senior engineer, your day-to-day work should help you a lot with the system design and behavioral rounds.
    • This was my experience interviewing for Robinhood coming from Meta: My work as a tech lead at Meta translated very well into the interview, so I didn't have to study that much to pass.
    • In general, you should be building up software engineering fundamentals that carry over wherever you go as a senior engineer. As you already alluded to, interview prep (especially the DSA portion) is bad for career growth as so much of it isn't fundamental or relevant to the job: It's a purely temporary exercise just to pass the interview.

    Junior/mid-level engineers will generally not have opportunities to do project management, leadership, and system design on the job, which leads to their interviews correspondingly being very DSA-heavy as well.

    If you're pretty certain that deep layoffs are coming and it's likely that your team/org will be hit, it might be worth it dusting off Leetcode. But until then, just focus on being the best software engineer you can be.

    Lastly, I highly recommend watching our "How To Survive Tech Industry Layoffs" masterclass if you haven't already.

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  • I know of two layoff scenarios: (1) stop the bleeding from a failing arm of the business (2) cutting expenses to create a leaner company.

    Failing Arm: For example, Uber cut their self driving arm in 2019. This layoff targeted an experimental and not profitable project within the company. While I'm not familiar with how Uber judged this project's success, it likely was not trending to meet those metrics or criteria. Rahul has a video that discusses evaluating wether or not you're working on a core piece of the business. Successful money generating orgs like ads will likely be last to go.

    Going Leaner: A company may look to cut costs to become more profitable. A publicly traded company will have quarterly and annual financial reports (10Q, 10K) that are filed with the SEC. Analyzing these reports is multifaceted and vary greatly between companies because of differing business structures. At a high level, a company's financial heartbeat will consider: (1) net income, which is revenue minus expenses. Earnings announcements cause market movements because a company will be more/less profitable than expected. (2) forward guidance by CEO--do they expect growth or contractions? (3) how much debt a company has taken on, and their likelihood of paying off the debt which can be assessed by a moodys credit rating

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