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For every company that makes headlines for its amazing stock price increases, there are others that don’t survive to see another day.
In 1991, Drexel Burnham was a wildly profitable multinational investment bank that was forced into bankruptcy by the New York Federal Reserve and the Securities Exchange Commission for illegal insider trading in the junk bond market. At the time of its insolvency, Drexel Burnham had 10,000 employees worldwide. One day they were working for the 5th largest investment bank in the United States and the next day they were in the unemployment line. Ten years later, Texas-based energy, commodities, and services company Enron collapsed; subsequently Enron’s accounting firm, Arthur Andersen, was dissolved because and its 28,000 employees had to move on. Then there was Lehman Brothers and Bear Stearns in 2008, followed by Dynegy in 2012 and Theranos in 2018. Today, it is FTX.
Every year companies go down the drain. They can be global conglomerates with tens of thousands of employees or the “Mom and Pop” restaurant on the corner. What binds them is that people are thrown out of work, and if you have ever been part of a corporate meltdown, you know it often happens in slow motion. Long before the lights are turned off and the doors are locked people know an epic collapse is on the way.
If you suspect your company is going down the drain, what should you do?
Don’t panic. Take a deep breath. It’s not your fault the company is failing (we hope) and the company’s fate should not adversely affect your professional standing. Uncertainty about your livelihood, financial security, and future is serious business, and the best thing you can do is remain as even tempered as possible. Try and avoid rash decisions. Proceed with prudence and professionalism.
Assess the environment. Do not rely on whispers, rumors, or media reports about the fate of your company. Do your due diligence and get the facts. You cannot make an informed decision about your future if you are not informed. For example, let us say your company is headed for bankruptcy. Which kind? Chapter 7 is a complete shutdown. Chances are you will not have a job for too much longer. But if it is Chapter 11, a reorganization and sale, you may survive (if you wish).
Get your financial house in order. If things are looking grim, now may not be the time to buy a new sports car or take that vacation in Bali. Until your situation is less ambiguous consider a more conservative lifestyle to make whatever transition is on the way easier and less stressful.
Decide your play. If your company is going down the drain, you have three potential plays – swim, sink, or hold.
Swim: You do not wait to see what will happen and get out as soon as possible.
Sink: You go down the drain with the company. Perhaps you need every penny of salary or severance. Maybe you are in a role that will guide the company in its final days and have been offered a lucrative retention to stay until the bitter end. Whatever the case, you’ll be the one to turn off the lights and lock the doors.
Hold: This is a form of intentional self-paralysis. You can sit back and watch the train wreck. Maybe it’s bad for you, maybe it’s not. You let it, whatever it may be, happen and let events dictate your next move.
And, of course, prepare for a job search. You know the drill. Update your resume. Update your LinkedIn profile. Create a profile and upload your updated resume to applicable job boards. Get your interview clothes ready. Seek help from your professional network. If you prepare in advance, you can make the job hunt and interview process easier to navigate.
Philip Roufail contributed to this article.
Scott Singer is the President and Founder of Insider Career Strategies Resume Writing & Career Coaching, a firm dedicated to guiding job seekers and companies through the job search and hiring process. Insider Career Strategies provides resume writing, LinkedIn profile development, career coaching services, and outplacement services. You can email Scott Singer at scott.singer@insidercs.com, or via the website, www.insidercs.com.
