Early Warning Checklist: Causation Factors and Warning Signs

Is it possible to prevent a business closing or mass layoff? Sometimes it is, especially if the company is aware of early warning signs and is receptive to exploring options that may help. While intervention may not save all jobs, it may save some and may help to prevent future layoffs. Print list of a list of common warning signs that often precede business closings and layoffs.


  • Obsolete physical plant
  • Outmoded operating procedure
  • Lack of spare parts
  • Old and outdated machinery
  • Speed-ups lead to older worker layoffs
  • Repairs are not made
  • Inefficient Production process
  • Equipment not up to quality standards
  • Environment problems
  • Facility is in a metropolitan or suburban area that is gentrifying.


  • Inability to pay bills on time
  • Managers, skilled workers or machinery moved to new plant
  • New plant is opened in low-cost location
  • Research and development are cut back
  • Fewer product liners produced
  • Parent corporation has major problems
  • Corporate merger acquisition creates excess capacity
  • Change in profit, market targets or distribution systems
  • Local subsidiary is milked for other investments
  • Hours and overtime eliminated
  • Managers replaced frequently
  • Weak management practices
  • Irregular work or production schedules
  • Lack of workforce training, upgrading or training cutbacks
  • Sales staff/marketing cut
  • Aging owners
  • Shifts reduced
  • Increase in subcontractors, temporary workers
  • Lack of management and engineering talent


  • Demand or sales declines
  • Products, processes of services become obsolete due to technological innovation
  • Increased domestic or foreign competition
  • Changes in state/national taxation, regulation, monetary policies
  • Changes in international relations (re: markets
  • Inventory stagnant
  • Loss of market share
  • Industry sector declines


  • Lack of access to raw materials, energy, products and services
  • Lack of skill in local work force
  • Lack of quality or availability of land or infrastructure
  • Changes to local/state tax or regulatory policies
  • Lacking transportaion
  • Proximity to market changes transportation costs, etc.
  • High insurance rates
  • Poor access to trucking/rail/water/air
  • Utility rates high or lack of energy availability
  • Business climate complaints

Source: DOLETA Rapid Response Layoff Aversion Guide, 2001 - A Project of the Steel Valley Authority

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