4 signs your company is quietly planning layoffs

“When companies stop bringing people in from the outside, it’s usually one of the first adjustments made before a formal headcount review,” says Eric Carrell, Dofollow.com co-founder and CEO.

“It costs nothing to pause hiring, and it buys leadership time to assess where the organization actually stands financially. Employees should pay attention to whether open roles around them are being filled or quietly shelved.”

Related: February unemployment takes unexpected turn following week of war

Sign # 2: Sudden cost discipline across departments. The phrase “if you’re not swimming forward, you’re sinking” applies here. Healthy companies are investing in the future and looking for ways to turn current profits into even greater returns. Unhealthy companies are seeking ways to cut costs beyond simply reducing headcount.

“Financial caution at the department level is typically a downstream effect of decisions being made further up,” Carrell explains.

“When middle managers are suddenly being asked to justify every line item, it usually means the pressure is coming from above. That kind of cost discipline usually reflects a company trying to improve its numbers before making bigger structural decisions.”

Sign # 3: Productivity metrics become more aggressive. If you notice your performance evaluations becoming more frequent or more aggressive, you can expect some employment changes in the near future. One question you should look out for, according to Dofollow.com, is “What does this role actually deliver?” When that question becomes more frequent, you should start paying attention.

“Companies almost always tighten their measurement frameworks before a reduction in workforce,” says Carrell. “It’s partly about building documentation, and partly about identifying where the organization can afford to cut. Make a note of it if you’re suddenly asked to justify your contributions more than usual.”

Sign #4:Leadership communication shifts in tone. You get used to a certain tone during your weekly meeting with management, but if you start to feel a shift in tone and language, then you can bet some tough discussions are being had behind closed doors.

“Leadership that stops talking about where the company is going and starts talking about how it’s managing where it is right now marks a meaningful change,” Carrell notes. “Executives don’t typically telegraph layoffs, but the language around financial discipline and short-term stability tends to arrive before the decisions do.”

U.S. employers cut 97,000 non-farm payroll jobs in February, a month when analysts were expecting the economy to add 55,000 jobs. The unemployment rate ticked up to 4.4% from 4.3% the previous month.

While the unemployment rate is slightly below the 4.5% that registered a year ago, the number of people who have dropped out of the labor force is up, as is the number of people who currently want a job.

The job losses were wide-ranging, and even health care, which has been a bright spot in the employment economy, saw a downturn in the month.

“There really is not much good news coming out of the employment report. There were declines in almost every category. Transportation, manufacturing, construction, information, and business services were all down. Health care had been propping up the numbers, but a large strike sent those numbers lower as well,” Helfstein said.

Despite the dismal outlook, there is a silver lining in the February jobs numbers for Helfstein.

“There is not much good news in the jobs report, given the broad-based declines, but there is a contrarian take,” Helfstein said. “Total jobs are still above the long-term trend, so the present downsizing is actually more of a rightsizing.”

Related: Layoffs in January reach recession-era levels

This story was originally published by TheStreet on Mar 21, 2026, where it first appeared in the Employment section. Add TheStreet as a Preferred Source by clicking here.