Signs your company might soon go belly-up

Signs your company might soon go belly-up

Summary: Before a company goes under, just about everybody knows it. And before everybody knows it, a bunch of people are already whispering in the corridors and around the water cooler, certain they see the writing on the wall.

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Before a company goes under, just about everybody knows it. And before everybody knows it, a bunch of people are already whispering in the corridors and around the water cooler, certain they see the writing on the wall. But what about you? Can you read the clues sprinkled like breadcrumbs down the cubicle aisles?

The benefits to the common worker of seeing the doom in your company's future before they get around to mentioning that, oh, paychecks are running a few days behind this week, are immeasurable: First of all, the sooner one has the inkling that their organization isn't doing so hot, the sooner they can get their resume in the hands of friends and former coworkers, in hopes to make an exit before the pink slips are shipped. Second, it is a lot easier to find a job if you already have one--or in this case, while you already have one. Finally, say you're in an IT group of 1,000 at a company that has decided to offshore the whole shebang (there are almost too many examples to choose from, sadly) in a desperate cost-cutting measure one day. Rather than be in that job market flooded with techies with experience similar to yours, you could be ahead of the rush, and hopefully in the front of the line for the best positions.

Here are some of the most common things to look out for. Do any one of these mean you should go into a full-out panic and take the first job you can get? Of course not. But if some of them sound all too familiar, it might be time to sniff out further clues that might protect your own interests, as you can be certain your employers are protecting their own.

  • It's no longer focused on what was once its business: Straying from the business’s main product or service is a common occurrence when a company is struggling. You work for a widget manufacturer that's suddenly making outside real estate investments? You're absolutely right to find that fishy.
  • Their customer base is limited. Say your company only sells their widgets to one or two buyers; if either of their accounts are lost to bankruptcy or the buyer opting for a competitor's widgets instead, your company may struggle to stay afloat until they can find a new one, if they find one at all.
  • It hasn't bounced back from its last downsizing. If two years after laying off 50 percent of the workforce, your company is still making the same number of widgets because employees are still doing the jobs of four people, you're right to feel a little unsettled.

  • All of your coworkers seem to be leaving. When eight employees leave a small buisiness in a single month, it might be worth questioning whether they know something you don't. Furthermore, if staff is a company's most valuable asset and they can't hang onto them, something is wrong.
  • It's just not fun anymore. Now, nobody is saying that work should be fun all of the time--it is work afterall. But when an organization that used to be lively and social sudden becomes a closed-door meeting and somber kind of place, it's like that there is something going on behind the scenes that has sucked the air out of the room.

Surely, we've missed a few. If you've been unfortunate enough to land at a sinking ship of a company, what are some of the other signs you've seen before the axe finally fell?

Topics: Enterprise Software, CXO, IT Employment

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32 comments
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  • Continuous management reshuffling

    My father in law was at a company that in its final two years replaced all the management that had been there for 10+ years with new college grads from outside the company. Now, I am not saying this is always the case, but in this situation a large part of the replacements were in accounting...and you can guess what happened next. It isn't inherently bad to bring in outside, experienced blood to turn around a company. But in his company they brought in lackies that would cook the books just how they liked. It didn't turn out too well for the 'long term' health of the company.
    aalhc5@...
  • RE: Signs your company might soon go belly-up

    1) People leaving for jobs that are lower down on the org chart than their existing jobs

    2) Day long meetings featuring upper management. Particularly if these occur more than once a week.

    3) Spending Freezes before the 3rd Quarter.

    4) Loss of focus on day-to-day activities by management.

    5) Announcing a new product line with very advanced features and taking pre-orders when they have not allocated any actual techs to the development yet.

    6) When they don't backfill management who have quit or layoff management.
    rijrunner
    • New product lines

      Your number 5, plus:

      Upper level execs showing "hot" development projects they don't understand to people you've never seen.

      If it was real development, would they show it to anyone who could steal it? No. These outsiders are people they're hoping will buy the whole company.
      paron
  • RE: Signs your company might soon go belly-up

    1. If employees need to wait more than 30 days for expense reimbursments after being submitted, there might be badness ahead.

    2. Employees in a remote office announce through e-mail distributions that Wednesday is "DVD day" in the lunch room starting at 10 AM....

    3. Your office gets a visit from the BSA and its attorneys.

    4. Support contracts are not renewed on equipment that supports production operations.

    5. Managers who worked long hours previously suddenly stop doing so and start leaving early.

    6. Managers working on cylinder heads in their offices during work time (yes, this really happened to me).

    7. Any time managment states that support or QA people will be doing something "indefinitely".
    mr.smoot
  • Good points, here are some more.

    1. When your company's CEO publicly declares that its competition is violating your company's IP and then does nothing about it.

    2. When your company's much anticipated and delayed product flat-lines in the market place.

    3. When your competition is giving away products that you charge hundreds of dollars for.

    4. When those same companies use a development model that pumps out products better, faster and cheaper.

    5. When, in spite of your company's long-term market dominance, there is persistent talk of your company's demise.
    kozmcrae
    • LOL - you need to focus on something else

      because you dreaming...
      TheBottomLineIsAllThatMatters
    • RE: Good points, here are some more

      Quite Intersting..
      Vinodk_sha
  • When management starts reminiscing...

    ... about past triumphs and the glory days of company growth. And they're nowhere near retirement.

    When someone awaiting one more promotion decides to retire instead.

    When negative responses to requests are consistent and the discussion ends Just be glad you have a job.


    A logical flaw in the comment, by the way. Quoting:

    Finally, say you???re in an IT group of 1,000 at a company that has decided to offshore the whole shebang (there are almost too many examples to choose from, sadly) in a desperate cost-cutting measure one day. Rather than be in that job market flooded with techies with experience similar to yours, you could be ahead of the rush, and hopefully in the front of the line for the best positions.

    [End quote]

    If such offshoring-associated (and other) layoffs are frequent, then the market will be continuously "flooded with techies with experience similar to yours" and the start position for good jobs will be occupied.
    Anton Philidor
    • Not sure I understand the last part...nt

      nt
      TheBottomLineIsAllThatMatters
      • There's not just one company in the country.

        If someone in the doomed company is the first to try to find a new job, there will be other applicants for the good new job found by the person fleeing. The Comment, on the other hand, referred to the job hunter being at the head of the line for the good new job.
        Anton Philidor
  • Corporate taxes in the U.S.

    Anton mentioned offshoring being a cause of local techie layoffs, leading to increased job competition and lower wages *here*. True. And what are the causes of such increased offshoring? Cheaper? Why? How about because the corporate tax rates in the U.S. are either the highest (or 2nd highest, depending on how you slice 'n dice) in the world! Of *course* India can do it cheaper! And look at the tech boom in Ireland...their corporate tax is 11%. John McCain is talking about cutting ours down to 25%. That would *still* be more than double Ireland's!

    My friends, I think he has a very valid point on that one. Obama counters by saying corporations do not actually pay their full rate here. That is true, they have loopholes -- but you can look at various investing web sites and among other data, their "effective tax rate". Here are just a couple examples from a few big companies, all listed for TTM (trailing 12 months):

    KO (Coca-Cola): 23.84%
    WMT (Walmart): 34.26%
    XOM (Exxon-Mobil): 44.68%
    MSFT (Microsoft): 25.75%
    IBM (IBM): 27.83%

    Is it any wonder these companies might go offshore? They can cut 10-30% off their tax bill by doing so!

    I'm pretty sure Obama would raise their taxes...to "spread the wealth". And notice: XOM is a good 10% higher than the others (I know, it's a small sampling, but find me another F500 that pays more than XOM). What was that about Big Oil not doing its share?

    Vote for smaller government, lower taxes for *everyone*!! That's the *only* path to long-term prosperity...vs. a short-term boost for "me". I hope this helps even a few see through the socialistic Democratic nonsense!!
    Techboy_z
    • Sadly it won't...and that's just the surface,

      Osama - oh sorry Obama's allegences (read the book) are very,very concerning and should be to anyone with half a brain. He makes Clinton look like an angel...two finger frothy would love the guy! If that tells you anything.
      TheBottomLineIsAllThatMatters
      • "Osama - oh sorry Obama"

        Anyone stupid enough to believe that Obama is a Muslim because of his name, or because of an outrageous smear campaign made of deceptive half-truths AND blatant bald-faced lies, deserves the government they get.

        Unfortunately, those of us smart enough to know that moderate doesn't mean psychotic terrorist liberal, and frothing, rabid conservative doesn't mean moderate, will also suffer from the results of your stupidity.
        bmerc
        • Hah...what a joke!!

          "Anyone stupid enough to believe that Obama is a Muslim because of his name, or because of an outrageous smear campaign made of deceptive half-truths AND blatant bald-faced lies, deserves the government they get."

          If it was *just* the name, then yeah, I'd agree. You need to read up on his connection to Raila Odinga in Kenya, who led the Muslim faction in their post-election revolts there...1000 dead in the wake of their Muslim insurrection.

          And read his condescending comments towards the bible. Read about how he went to an Islamic school in Indonesia, where his teacher said he was excellent in his recitations of the Koran. Read about his *long* association with Rev. Wright -- that was *not* about Obama being a Christian...rather, it was everything to do with him believing in the radical, anti-white racist views that Obama and his associates hold.

          None of the above is smear - it is well-documented. The real farce in all this is that the liberal media utterly, flippin' FAILED the American people, by not researching and reporting on Obama's past. THAT is why we are hearing this stuff piece-meal -- yet, the facts are now gathering, and showing to be true, as evidenced by the massive vote fraud currently being detected in Ohio.

          "Unfortunately, those of us smart enough to know that moderate doesn't mean psychotic terrorist liberal, and frothing, rabid conservative doesn't mean moderate, will also suffer from the results of your stupidity."

          LOL - you can even dare to try to paint Obama as "moderate"??? Even the Dems recognize him as about as far left as they come in the Democratic party!! You are a joke!
          Techboy_z
          • Amen...

            Sadly, the bulk of the American populace has been brain-washed by it's Muslim-owned socialist/marxist tree-hugging "media" to believe everything they say. Obama will be president, and the USA will officially become "the late, great USA". Still, it has been predicted and will be so. When a country turns from it's founding roots, abandons morality and tries to divide the land of Israel, the pounding of the footsteps of judgment grow to a deafening roar... until the whole nation collapses with a thundering crash. I trust America will enjoy the company of the Canadians and Mexicans in the new NAU (North American Union).
            naibeeru
          • Totally man.

            You forgot the part about the extraterrestrials blasting all the non-Christians with their ray guns and kick-starting Armageddon.
            kozmcrae
          • Ahem...

            "You forgot the part about the extraterrestrials blasting all the non-Christians with their ray guns and kick-starting Armageddon."

            Actually...that's called "Large Hadron Collider". But, yeah, you're on track.
            Techboy_z
    • OK...let's try it...

      ...lower taxes, smaller government and de-regulation. NO WAIT...we already did...starting in 1980...AND IT DID NOT WORK! You had your chance now STFU!
      wmlundine
      • Wrong.

        Check again...taxes went up during the Reagan admin, due to the Cold War spending -- we essentially spent the U.S.S.R. into oblivion. And that was a Democratic Congress that built those budgets.

        Deregulation is *not* what caused the current mess...some of these financial instruments are fairly new: we did not know the effects (though surely they could be guessed at?) that could be wrought until now, by securitizing mortgages. The bigger issue you ought to be looking at is that DEMOCRATS were the ones pushing for loans to be made that never should have, as part of their usual *socialist* agenda to give everything to everyone, whether they can afford it or not!

        19 Republican Senators sent a letter to the House and Senate leadership two years ago, warning that Fannie Mae had grown too large, and that the consequences of it failing would be huge, and warning that due to the inadequate funding of Medicare and Social Security, the U.S. government was already in a funding crunch and would not be able to adequately back Fannie. They asked for the matter to be brought to the floor for discussion. That was shot down - it never came to the floor. Back during the Clinton administration, Barney Frank and Chris Dodd (among others) were leading the push for these subprime mortgages, and for government approval for Fannie to buy more of them off of banks, clearing the way for banks to lend more. And they then saw to it that ACORN had funding to enable it to go to banks and browbeat them with threats of discrimination if they failed to make more subprime loans. Enter your man, Obama.

        You wanna tell me to STFU? You better check out the facts, mister. Because your sorry @ss is gonna be paying for this mess in loss of $$$ and freedom, if Baraq Hussein Obama enters the White House. You can't even get the 80s straight 20+ years later, and you expect us to listen to you on more recent events?
        Techboy_z
        • You said...

          ..."Vote for smaller government, lower taxes for *everyone*!! That's the *only* path to long-term prosperity...vs. a short-term boost for "me". I hope this helps even a few see through the socialistic Democratic nonsense!!".

          That is exactly what Reagan said. That is what Bush SR. said. That is what M Friedman said. That is what N. Gingrich said. That is what G.W said. That is the core GOP economic paradigm that has dominated the last 30 years and that has resulted in our current economic crisis. We should finally put that BS to rest. The tax revolt of the 80's and anti-government backlash of the period was a racist backlash. The whole concept is now completely discredited and we need to throw a loop round the icon of Ronald Regan and drag his sorry self through the street like the statue of Saddam Husein. If Senator Obama ascends to the presidency there may still be hope for America. Otherwise we are sunk.
          wmlundine