In the event of a reduction in force or layoff, it’s important to inform affected employees in a timely, professional and compassionate manner, while also adhering to employment laws. It can be tricky and emotionally taxing, but we’re here to help with some tips for best practices and a downloadable RIF/layoff letter template.
what is a reduction in force (RIF)?
A reduction in force (RIF) is when a company permanently eliminates positions with no intention of refilling them in the future. RIFs may occur for several reasons, including when a business pivots or restructures, shutters an office or branch, moves to a new location, undergoes a merger or acquisition or faces financial hardship.
the difference between RIFs, furloughs and layoffs
Though some may use the terms interchangeably, RIFs are not the same as furloughs or layoffs. A furloughed employee may see their hours temporarily reduced, but they remain an employee. Layoffs are typically intended as temporary, such as during a slow season or due to budget concerns. A layoff leaves the door open to rehire employees in the future or, if they’re unavailable, hire new employees to fill those positions. RIFs result in a permanently lower headcount. A layoff could ultimately become a RIF if the company never rehires or restaffs.
what to include in a RIF/layoff letter
No matter the cause, conducting a RIF or layoff is never an easy choice. Impacted employees are likely to be upset and may feel hurt or worried about what they’ll do next.
If a RIF isn’t conducted carefully, it could lead to negative reviews on social media, bad press or litigation. But if a company can show impacted employees that it still appreciates and cares about them, those employees may go on to become some of the company’s top brand ambassadors. Properly managing a RIF also increases the chance that a top employee would be willing to return if circumstances allow in the future.
For an outgoing employee, a RIF begins with a notification meeting, followed by written details. That’s why it’s crucial that HR managers send a layoff or reduction in force letter to employees that is clear and respectful, and that details what will happen and what the affected employee can expect.
Note that per the Worker Adjustment and Retraining Notification (WARN) Act, employers with 100 or more employees must provide notice of a mass layoff at least 60 calendar days in advance. More information regarding the WARN Act is available via the U.S. Department of Labor.
a RIF or layoff letter should include the following
- The reason for the RIF or layoff. Be as transparent as possible. Let the employee know what steps you took to prevent this outcome, and that it’s not their fault their position is being eliminated.
- How the employee will be affected. If this is a RIF, be clear that their position is being permanently eliminated.
- The employee’s last day. Be as precise as possible. Let them know the exact date if you can. If there is any equipment they will need to return, let them know when and how to do that.
- When and how the employee’s last paycheck will be paid.
- Relevant information about employee benefits, including any severance pay, paid-leave or vacation payouts, how to submit for reimbursements and when their medical benefits will end.
- How employees can access outplacement services. Outplacement services are a great way to let affected employees know you support them as they prepare for the next phase of their career.
- Employee rights, including their right to appeal the company’s decision and to seek legal counsel.
- A positive acknowledgment of their service. Say thank you and let them know you appreciate their time and dedication.
what not to include in a RIF/layoff letter
- Unclear or wishy-washy language.
- Language that suggests blame. Avoid insinuating that employees could have done something different to prevent this outcome.
- Language that is dismissive of employee rights or attempts to dissuade employees from using them.
what is outplacement?
Outplacement services are an essential unemployment benefit to help transitioning employees find new jobs. Services may include a targeted and optimized resume and social profiles, personalized career coaching and access to targeted job leads. Outplacement is considered part of the RIF severance package, which may also include salary and health benefits continuation, vacation payout and other means to ease the transition.
get help writing a RIF/layoff letter
This task may seem daunting, but it doesn’t have to be. Download this free sample layoff letter template to get started. It serves as a foundation for a compassionate, legally-sound letter, prepared in a way that’s easy to adapt to your company’s unique needs. Be sure to have your letter reviewed by your legal counsel to ensure that it is in compliance with law, regulations and company policies.