Evaluating a Career Change in the Midst of Layoffs

Layoffs are rough. But how can you spot red flags ahead of your next career move to minimize the chances this might happen to you? I've taken part in hundreds of interviews, and I'm always amazed at the questions certain candidates ask when evaluating their next move. Here's what I see and things you might want to ask when deciding on your next move.

How I see things playing out in the market today

Sometimes, everything is just awesome. VC money flying around left and right, workers having endless options and in high demand, and everything is roses. Then comes the whammy. Market headwinds, high inflation, higher interest rates, and unsustainable business models that can't combat the need for layoffs and furloughs. No one is immune, but some are ready.?

We're seeing it just about every day now. More and more companies are begrudgingly announcing layoffs as a means to cut costs. And we are seeing it in a couple flavors.

1. Many eager, high-growth startups operate towards future-state necessity and optimism. It's all about speed and time to market and the window for success narrows over time. The company is building a great product that solves a real need, but it's dependent on a market that identifies that need as a high priority and has a meaningful impact on increasing revenue and/or decreasing costs (or other, this is overly simplified). Perhaps they've raised significant VC money and the company perks and compensation look irresistible, but how does their business model stand up during a time when the market is clenching their wallet? Are they able to raise more money? Can they weather the storm?
2. On the other end of the spectrum, large enterprises aren't immune to cutting costs via layoffs/furloughs and it's typically driven by value and earnings for shareholders.?Can we do more with less? Could certain operations be sent to lower-cost offshore teams? Can we use consultants to augment work without hiring full-time employees?

Questions to think about when evaluating your next gig

Business Model

• Is the company profitable today and continue to be profitable with growth?
• Does the company run the business at a loss given the company is in a growth stage with a path to profitability?
• If operating at a loss, when does cash flow become an issue?
• When cash flow becomes an issue, how likely is the company to raise additional capital? Will they be able to? How many rounds so far?

Revenue Model

• Is the company revenue generating today?
• Is the company dependent on new business?
• Can you sustain current operations with existing recurring revenue and customers?
• How is the company doing YTD compared to the budget set forth in Q1?

Talent Acquisition

• Is the company hiring for current demand or expected future demand?
• Is the team I'm joining new and/or experimental or an established business unit?
• Is my position a new hire or a backfill?
• What are the company's attrition rates YTD? What are the top reasons people leave?

Your role

• Am I revenue generating or a cost center (e.g. billable vs non-billable)?
• In the event cutting costs is on the table, can my company replace me with a lower-cost solution?
• How will I know if my work contributes to meaningful business metrics (e.g. gross margin, new sales, cost savings, etc.)?
• Have layoffs happened in the past? What was the reason?

Leadership

• How was the leadership assembled?
• What type of transparency is provided to employees?
• What is their vision for success?
• How does their vision evolve in good times and bad?

The above questions are ideas of things you might want to ask and consider when deciding on your next move. Compensation, who you will be working with, benefits, and remote work items are all things you should absolutely consider in addition to this. Like a lot of us, you don't know until you know. The best questions I've been asked are from people who experienced bad situations and I hope this helps other as they evaluate.?