This is a very good question. Unfortunately, there isn't really a good answer for this because those of us on the ground aren't privy to the meetings or decision-making process where such things are decided. I have no super accurate formula for you, because we're almost always operating on incomplete data. The best I can offer is a general approach that I've internalized over time that has served me well.

First and foremost, it costs you very little to update your resume if you're feeling a little nervous. You don't have to go so far as to apply to new jobs, but having an updated resume while you're still fresh on what you've been doing is a good thing - especially when you don't have any additional or external pressure on you. It only takes a little time and it's a healthy reassurance that you're ready to start looking if the need arises.

Now... the main reason layoffs come generally depends on one major factor - whether you're at a company that's privately or publicly owned. Privately-owned companies operate at the whim of their controlling stakeholder - e.g. Tim Sweeney has a controlling stake of Epic Games, Mark Zuckerberg controls 60% of the voting shares at Meta, etc. The owners are the ones who decide whether to cut staff. In these situations, as long as the overall company is still doing well enough financially, a favored project that stumbles (again) still gets a lot more leeway - they'll often let it slide even if there are setbacks. Even project cancellations may not result in layoffs so much as workers getting moved around to other projects instead. The key is the "doing well enough financially" part - if the company financials become unhealthy, the knives come out. At such employers, watch out for funding deals with other companies or investors falling through - that's a really bad sign and you should consider updating your resume and starting a job search if you see or hear about that happening.

If you're at a publicly traded company, you're really at the whim of the quarterly investor report. Investors buy into a given company in order to get a return on investment, so they need to see why they shouldn't take their money and invest it elsewhere, especially if those other places can offer a better return. The general case for a better financial future is the company "cutting costs", which is to say our jobs. In this situation, the cuts typically come from cancelling underperforming or troubled projects, cutting the lower performing products, and cancelling longer-term projects. The safest projects to be on at these companies are the workhorses - the long term sustaining franchises that pay the bills. The most dangerous projects at these companies are the experimental/new things - the untested cool new ideas. At such an employer, I would pay close attention to the quarterly investor reports at your company and see whether the company is hitting its targets, especially if I am on a project that is new and/or struggling. Whenever I see one bad quarterly report, I update my resume. If I see two bad quarterly reports in a row, I start checking my recruiter emails.

This isn't to say that this is all there is - there's a lot we aren't privy to. But these general rules have served me well over the years. Having gone through as many layoffs as I have, I developed a more subconscious sense of these things - bad team morale is often also a major indicator of layoffs in the near future. It's hard to explain, sometimes things just don't feel right. Pay attention to what the leadership says during the all hands meetings and try to read between the lines. The words they share will always be portrayed positively, but the proof is almost always in the pudding - the financials are what matter.

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