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Navigating the corporate world as a project manager can be tricky, especially in a private equity (PE)-funded company. These organizations often experience rapid growth and equally swift changes due to the focus on maximizing short-term profitability and operational efficiency. Private equity firms typically invest with the goal of improving profitability and then exiting within a few years through a sale or IPO. This can mean layoffs, especially when the focus shifts to streamlining operations and cutting costs.
If you're working in such an environment, it's important to stay aware of the signs that might suggest your role is at risk. Here are ten warning signs you should keep an eye on to avoid being blindsided by a layoff.
1. New Leadership or Management Changes
One of the first moves private equity firms often make is bringing in new leadership or shifting management to align with their strategic goals. If your company has recently gone through a leadership overhaul, particularly at the C-suite level, there could be restructuring on the horizon. These leaders may focus on cost-cutting initiatives that could affect your role as a project manager.
2. Shift in Business Strategy
If the company begins to focus more on short-term profitability over long-term projects, you may see a reduction in resources or the importance of project management roles. Projects that aren't directly tied to immediate revenue generation may be shelved or canceled, putting you in a vulnerable position.
3. Sudden Budget Cuts or Project Cancellations
If your projects are suddenly delayed, canceled, or significantly underfunded, it could be a sign that the company is tightening its budget to meet the private equity firm’s profitability targets. Project managers rely on consistent funding and support, so any pullback in these areas may indicate that your position is no longer a priority.
4. Increased Focus on Outsourcing
Private equity firms often look for ways to reduce costs by outsourcing non-core functions. If you notice an uptick in outsourcing efforts or the hiring of external consultants to manage project workloads, this could mean your role is being reviewed for potential elimination.
5. Frequent Layoffs in Other Departments
If you see rounds of layoffs happening in other departments, especially in non-revenue-generating areas, it may be a precursor to broader layoffs. As private equity-funded companies often focus on efficiency, cutting “non-essential” staff is a common practice. Project management roles, while critical, can sometimes be viewed as expendable during cost-cutting phases.
6. Lack of Inclusion in Key Meetings
If you find yourself excluded from meetings where key strategic decisions are being made or from project discussions that you would typically be a part of, it could be a sign that your role is being de-prioritized. This marginalization may indicate that the company is considering operating without your position or reducing its importance.
7. Pressure to Increase Project Outputs Without Additional Resources
Private equity firms often push for greater efficiency and performance but may not provide the additional resources needed to meet new expectations. If you're being asked to manage more projects or hit tighter deadlines without any increase in budget, team size, or tools, it could signal that the company is trying to extract maximum value from you before a potential layoff.
8. Unclear Future for Long-Term Projects
If your long-term projects are suddenly put under review or placed on hold with no clear direction, this is a major red flag. Private equity firms tend to focus on initiatives that generate immediate returns, and long-term projects may be seen as a drain on resources. As a project manager, if your roadmap becomes less certain, it could be a sign your role is at risk.
9. Reduction in Communication and Transparency
A decline in transparency from upper management, especially regarding the company’s financial health or future plans, can be a sign of upcoming layoffs. If leaders are no longer sharing updates about the company's trajectory, or if there’s a sudden shift to more vague or generic communications, you may want to prepare for potential job cuts.
10. Hiring Freezes or Decreased Investment in New Initiatives
If the company halts hiring or stops investing in new initiatives, it may indicate that cost-cutting measures are in effect. A hiring freeze often signals that the company is bracing for tough financial decisions. Since project managers are closely tied to new initiatives, a freeze can lead to fewer opportunities and possibly a reduced need for your role.
What to Do if You Notice These Signs
If you notice any of these signs at your private equity-funded company, it’s essential to take proactive steps to safeguard your career:
Update Your Resume and LinkedIn Profile: Make sure your resume and LinkedIn profile are up to date with your latest accomplishments. Highlight measurable outcomes from your projects to make yourself more attractive to potential employers.
Expand Your Network: Strengthen your professional network both inside and outside the company. Reach out to industry contacts, attend networking events, and consider reaching out to a mentor who can provide guidance.
Look for New Opportunities: Begin your job search early to avoid being caught off-guard. Even if you don't leave right away, keeping an eye on other opportunities can give you options.
Enhance Your Skills: Consider learning new skills or certifications that can make you more competitive in the job market. Staying current with the latest project management tools and methodologies can give you an edge if you need to transition to a new role.
Have a Conversation with Your Manager: If you feel comfortable, have an open conversation with your manager about the future of your role and how you can continue to add value to the organization.
While layoffs are never pleasant, recognizing the warning signs early can help you prepare and take proactive steps to protect your career. Private equity-funded companies often operate with a focus on efficiency and short-term profitability, which means project managers may be vulnerable to cuts, especially during times of restructuring. By staying aware of these potential signs and taking appropriate action, you can better position yourself to navigate any changes and ensure your career continues to thrive.
About the Author
Lori Schoenhard is the Founder and Principal of Athena Project Consulting, LLC.
Lori possess two decades of IT leadership expertise, building and leading Project Management Offices (PMO), managing complex global enterprise programs across cross-functional teams, spearheading change management initiatives, and providing coaching to program and project managers. She has worked with Fortune 500 companies, SaaS companies, digital agencies, and SMBs to deliver impactful results.
Lori holds several project management and industry certifications: PMP, CSM, CSPO, SAFe, ITIL. Lori holds a Masters Degree from Boston University in Computer Information Systems and IT Project Management.
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