What Do You Do When Layoff Rumors Fly?

by Derek Loosvelt | September 09, 2008

With Lehman Brothers shares dropping 45 percent (and to their lowest in a decade) on reports (which may or not be true) that Korea Development Bank was unable to cut a deal to bailout the ailing investment bank, it seems a good time to address a dilemma that has faced several banking insiders in the past year and is sure to face more soon: What should you do when you hear a rumor that your firm might be making a significant number of layoffs?

Backing up a bit, to prepare for situations like this, it’s always a good idea to have an updated resume on hand. So, make sure to continually update your resume while on the job, because you never know when you’ll have to attach and send it out in a matter of seconds. It’s also a good idea to stay in touch with headhunters, so if you do need them at the drop of an axe, you have some solid relationships already in place.

When a rumor does arise, you first want to make sure it isn’t just that—a rumor. So, asking your direct manager if there’s any merit to the rumor is a smart initial step. Depending on the rumor’s validity (or the validity, in your opinion, of the response to your question), you can than begin to evaluate your options.

If you find out that the rumors are true, and cuts are imminent, it’s best to wait it out—that is, definitely start your job search but don’t be too quick to leave the one you have just yet, since you could lose a chance at securing a very healthy severance package (see the In the Black post dated August 27th for just how healthy).

However, if you discover that layoffs are coming, but not for some time, it’s time to start searching far and wide for that next job. By doing this, you’ll avoid having to compete for similar open positions with the (potentially) many others who will be looking for new homes when the axe finally comes crashing down. Though, keep in mind that if you do make an exit before the layoffs occur, you will forego any severance, which could be a small price to pay versus the alternative: out of a job long after the severance runs dry.

If you have any further recommendations and thoughts on what to do when the layoff rumors fly, or any  predictions about the future of the bank known as the Brothers, we welcome, as always, your comments below.

Filed Under: Finance


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