Is Your Job At Risk? How To Protect Yourself From A Mass Layoff


Is Your Job At Risk? How To Protect Yourself From A Mass Layoff

Job – One of the most curious things about the stock market is that it’s slow to rise and FAST to fall. The S&P 500 took two years to climb 14% to 2,100 and two weeks to erase all the gains at one point in 2016. This phenomenon simply points to the human condition of being cautious when times are good, and absolutely freaking the freak out when times are not!

Hiring managers are just as bad as investors. Not only do they tend to over-hire on the way up because it’s not their money they’re spending, but they also tend to over-fire on the way down because it’s not their lives they’re hurting. They selfishly think that the more people they let go, the better their chances are of keeping their own jobs! Stock market corrections of 10-20% are enough to make managers wig out, even if the markets are still up 50% since the day they started.



I was a manager for several years and someone who also awkwardly sat as a lame duck for two months after telling everyone I was leaving. Let me tell you three simple signs that indicate your job may be at risk.

1# You don’t get a top review score even though you’re doing great. Even though most employment is at will in the United States, every responsible manager must have some documentation before s/he can lay you off. If you have top marks in your review, get laid off, and the department doesn’t shut down, you have grounds to raise a fuss that you were illegally targeted for reasons other than performance e.g. race, sex, political views, religion, sexual orientation, etc.

2# You’re starting to get excluded from e-mail chains you were normally CCed on before. If your future is at risk, managers don’t want you to know about future company plans. Managers tend to avoid you until SURPRISE, you’re FIRED! The reason why managers do this is because managers generally dislike ripping the band-aid off in one violent move. Trying to lay someone off is like breaking up with someone you no longer like. You hope to drop enough hints for the person to leave voluntarily (and save the company from paying a severance). But if the person just doesn’t get the hints, there’s no choice but to confront and say your services are no longer required. A manager’s reluctance to confront is one of the key strategies to take advantage of according to my book, How To Engineer Your Layoff.

3# You just don’t get along with your manager and colleagues. Poor performance is one thing, but not being able to comfortably grab a beer or a lunch one-on-one with your manager or immediate colleagues is the biggest reason why your job is at risk. In an optimal world, only the most productive people thrive. But companies are made up of people who show tremendous bias towards people they like, regardless of productivity. At my old office, my office manager seemed to favor colleagues who donated to his favorite charity. After work, he’d only hang out with people from his same background. If you were different, he avoided eye contact when talking with you. He was a shifty character who finally left recently to join a hedge fund to nobody’s surprise.

It’s important to realize that during a mass layoff, it becomes a numbers game for survival. You want to blend in with the masses, and stand out as someone who cares and tries harder.


In a recession, no job is safe. Even our bloated government had to cut Federal workers during the last downturn. But some industries are more at risk than others. Be on red alert if you work in one of the following industries:

1# Manufacturing: The fabrication, processing, or preparation of products from raw materials and commodities are all under attack because margins are razor thin. This includes all foods, chemicals, textiles, machines, and equipment.

2# Finance: Investment banking, private equity, venture capital, money management, and hedge fund employees are all at risk because a bad stock market usually means investments are going sour, deal flow is drying up, and trading volumes are declining. While there are plenty of ways to short the markets, it’s generally much harder to make money in a down market than an up market.

3# Technology: The tech/internet sector is equally as cyclical as the finance industry. Creating technology requires massive capital expenditure. As a result there tend to be years of either massive oversupply or undersupply that wreak havoc on demand, pricing, and profitability. For example, it costs over a billion dollars and several years to build a semiconductor foundry. By the time the factory is built, the cycle could have already turned. Production of new wafers exacerbates pricing even further.

4# Luxury Goods: Nobody needs a $100 t-shirt, a $2,000 hand bag, or a $50,000 automobile. In a recession, most people make do with what they already have. It’s why I’m long Honda in my Motif portfolio and not BMW.

5# Housing: Housing goes through the same boom bust cycle as technology due to building oversupply and undersupply. Building a home usually takes at least a year. Building office buildings can take multiple years. Get caught in the wrong cycle and you’ll see many unfinished buildings dotting the skyline as we saw in Bangkok during the Asian Financial Crisis of 1997.

6# Oil & Gas: It goes without saying that with WTI oil at $30/barrel or lower, oil & gas companies will go under because their cost to dig out a barrel of oil is greater than $30/barrel. Oil producing countries like Canada will suffer. Towns in North Dakota will go under. Houston may be in trouble with 50,000 jobs employed in the space.

7# Restaurant: Why eat out when you can eat ramen noodles and drink free tap water at home? Fast food such as McDonald’s might do OK as people subsist off $1 meals like I have, but paying up for food is the easiest expense to cut.

8# Money losing startups: If your startup has no profits, requires $3 in spending to acquire $1 worth of revenue, produces a product that nobody really needs, and only exists due to venture capital money, your startup will be laying people off or going under eventually. Nobody needs the services of any on demand company. People will just start taking the bus, cleaning their own houses, washing their own clothes, and parking their own cars. It’s a good thing that most people joining startups already realize they are underpaid and have equity options that are equivalent to lottery tickets.



The people who are most financially secure have the following:

1) Multiple income streams: You’ve spent years building up multiple streams to bolster your main day job income stream. Various income streams include P2P lending, dividend income, CD interest income, driving income, teaching income, and online income. In other words, you have financial buffers for your financial buffers.

2) Flexible living cost structure: When times are tough, it’s important to have the ability to lower expenses according to a decline in income or a heightened sense of risk from your day job. The more you can live below your means, the more you can adapt.

3) A diversified net worth: The majority of your net worth is not invested in things over which you have absolutely no control. Your net worth is diversified and some of your assets can be positively affected by your effort e.g. real estate and a business. See: Recommended Net Worth Allocation By Age

4) An Armageddon Fund: Roughly 10%-20% of your net worth is in CDs and cash. If all goes to hell, you sleep well knowing everything will be OK. Your Armageddon Fund helps you stay the course and not panic sell. Your cash hoard helps you take advantage of opportunities.

5) Self-awareness: The more self-aware you are about your strengths and weaknesses, the more you can take action to minimize your weaknesses and emphasize your strengths. Because I tend to get emotional about stock investing, years ago I stopped trying to pick stocks for the large majority of my investable assets. Instead, I invested in index funds, ETFs, and real estate. Further, I realized at work I started not trying as hard anymore, which meant making a change to be fair to all parties.


If you want job security you must do the following:

1) Swallow your pride and kiss your boss’s ass: Your boss could be the most terrible micromanager on Earth. That’s your problem, not hers! You must figure out what makes your boss happy. Maybe she loves cats. Make sure you let her know you’re considering adopting a cat! Maybe Marisa Mayer and Sheryl Sandberg are her heroes. Make sure you’re able to quote a line from Lean In to her while also telling her how mean the mass media has been to Marisa. Maybe your boss loves the New York Yankees. Make sure you know each year the Yankees won the World Series. Bosses have a very difficult time letting go people they like. Make sure your boss loves you. Is your nose brown enough to get ahead?

2) Make yourself indispensable: If you were let go today, would your colleagues and boss miss you? If not, you’re as dispensable as toilet paper! You must take on a project or do a job that only you know how to do well. If you’re the only one who knows how to use the latest inventory management software, how can they fire you? If possible, build relationships with your firm’s most important clients. If you are buddies with a large client, your manager won’t let you go for fear of losing their business.

3) Work longer than everybody else: You don’t want to be one of the delusional ones who only works 40 hours a week and complains why s/he can’t get ahead. During difficult times, it’s all about getting in before all your co-workers and leaving after all your co-workers. Hopefully you are doing something productive with your time, but even if you are just twiddling your thumbs, the immediate thought from a manager’s perspective is that your hard work will be desperately needed when things get really rough. The people who are out of sight because they work from home will be the first ones to be let go. You must take one for the team and suffer more than everyone else.

4) Always be looking for another job: While you’re putting in your time and becoming indispensable, you must also secretly be looking for a new job. I know this sounds disloyal, but if companies are conducting layoffs, they are not being loyal to their employees. Pensions are a rare animal as well, so don’t bother trying to hang around for a certain amount of years. During times of crisis, you must look out for number one. Hopefully you’ve already started your website to brand yourself as a rockstar and create a platform to make extra income.

5) Take people who matter out to lunch: Nobody can resist a free lunch. At the same time, very few people have the wisdom, courage, or generosity to take people who matter out to lunch! When was the last time you treated a colleague or a manager to food and beverage? People who matter are generally the ones who always take others out to lunch. Therefore, your kind gesture will shock them into liking you. Give, give, give, in order to get. Managers do not lay off thoughtful people they like. And if you start volunteering at your manager’s favorite charity, you almost become untouchable. Managers fire people who duck out early, gossip all day, and never do what’s more than asked.


In 2012, I got laid off from a job I spent 11 of my life doing. Although my layoff was strategic, I’m sure several people were happy to see me go. I no longer kissed my boss’s ass. I spoke up when I thought things were unfair. I’d already spent two years training a subordinate to do my job, who I knew was chomping at the bit to take over. And I was taking 6-7 weeks off a year, which is unheard of in the finance world, even though that’s what I was entitled to.

The key to handling any layoff well is preparation. You don’t need to follow my example and negotiate a 5 year severance package, although I can’t for the life of me think why anybody would prefer quitting with nothing in their pocket. It’s been four years since I left, and I’m getting another ~$6,800 after-tax distribution this month I would have lost had I quit. In 1Q2017, I’ll finally collect the remaining ~$40,000 balance of this investment fund, all thanks to getting laid off.

In anticipation of change, start locking down your finances now. And for goodness sake, do things today to make your boss and your colleagues like you if you don’t want the freedom of an unemployed person. Even if you do get laid off, things might not be so bad. There’s a plethora of things you can do with your one and only life!


Start Your Own Website, Be Your Own Boss: There’s nothing better than starting your own website to own your brand online and earn extra income or freedom income on the side. Why should LinkedIn, FB, and Twitter pop up when someone Google’s your name? With your own website you can connect with potentially millions of people online, sell a product, sell some else’s product, make passive income and find a lot of new consulting and FT work opportunities.

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