What it measures
The Layoff Cycle Index is the historical percentile of three lenses on cycle-breaking pressure visible in earnings calls: average layoff/restructuring mentions per call (cohort), average recession/slowdown mentions per call (cohort), and the inverted margin guidance direction (lowered margin guidance lifts the index). High readings mean management is collectively preparing for a downturn — restructuring, lowered guidance, defensive language. Low readings mean management is expanding.
Why these three components
Layoff mentions are the cleanest forward indicator — companies announce restructuring before the BLS payrolls report registers the cuts. Recession talk captures when the consumer-facing companies start naming the slowdown. Margin guidance lowered (inverted = positive contribution to the index) captures the financial signal — the cycle breaks when margins compress.
Historical reference points
Late 2022 — index reads ELEVATED as tech layoffs accelerate and consumer companies cite trading-down. Q1 2024 — index settles into WATCHFUL. Late 2025 — index begins rising again on renewed AI-driven layoffs across knowledge work.
How stewards use this
Read against The Boardroom Index. When Layoff Cycle is rising AND Boardroom is high, management is collectively saying everything is fine while quietly preparing for trouble. That divergence — confidence falling while sentiment stays high — is the most reliable cycle-break signal in the transcript corpus.
History note
History recomputed 2026-09-21 on the rebuilt five-year Discourse corpus under the canonical discourse.* definition: readings before 2026-09-19 are weekly as-of recomputes that replace the history originally computed on the pre-rebuild corpus.
Revision — 26 September 2026
From 22 to 25 September 2026 the Discourse readings this index uses included about 159 companies outside the S&P 500, which had been added to Palanor's company list for other purposes. The S&P 500 Discourse readings now include S&P 500 companies only, and every reading from 22 September was recomputed. The 25 September reading moved from 34.0 to 35.2. Readings before 22 September were not affected.