how to prepare employees for a layoff

Preparing Employees for a Layoff/Termination


Proper planning can mitigate risk during a layoff or termination and help ensure employees understand what they need to do so they are more likely to have the most positive reaction possible.  One of the most difficult parts of being laid off is the lack of information. Employees may not know their rights, how to access unemployment benefits, or what steps to take next. Employees should be told the reasons for their layoff or termination, and they should be given clear directions for what they need to do once they are no longer employed. 

Employer Responsibility


Gather Company Information

The first step in the process of a layoff is to review information on the company termination or layoff policy. This includes gathering the number of employees who will be laid off, their roles and the anticipated last date of employment. This information illustrates how much of an impact this will have on the company.

Review List for Protected Classes

Protected classes include individuals of a certain race, color, ethnicity, national origin, religion, gender, age (40 or over), those with a disability, or those who have veteran status. Evaluate percentages within this class and be prepared to substantiate your numbers.

To comply with the Older Workers Benefit Protection Act (OWBPA), employers must release any claims under the Age Discrimination in Employment Act (ADEA) when employees are asked to waive age discrimination claims in exchange for severance pay. OWBPA lists seven factors that must be satisfied for a waiver of age discrimination claims to be considered “knowing and voluntary”.

Comply with the WARN Act

The federal Worker Adjustment and Retraining Notification (WARN) Act requires employers conducting a large-scale layoff to provide 60 days’ notice (with the exception of Iowa which requires a 30-day notice while NY requires 90 days) to affected employees. Employers must inform affected employees if the layoff is permanent or temporary and if the latter, what the expected duration is.

Provide Employees a Separation Package that Includes the Following:

  • The reason for the layoff or termination.
  • A copy of any agreement between the employer and the employee that covers termination or severance pay.
  • Notice of any right to appeal the employer’s decision to lay off an employee.
  • Detailed benefits information, such as 401K, FSA, COBRA, and Group Insurance Plans, etc.
  • Information about their last paycheck (cancel future direct deposits)
  • References for future job applications.
  • Other company or external community resources or outplacement services
  • Thank you letter for their service.

If Terminating, Conduct an Exit Interview

When conducting exit interviews, there are a few important things to keep in mind:

  • Exit interviews should be conducted by a trusted member of staff.
  • Prepare questions in advance, so that you can measure results across interviews
  • Keep the interviews confidential and communicate to the employee in question that the results will be used to improve workplace conditions.

Technology and/or Security Considerations

  • Identify any information systems or other security issues related to the reductions and consult with appropriate technology or other support units to mitigate them.

Communicate With Remaining Employees

  • Inform other employees of their co-worker’s departure, but do not give details. Thank the remaining employees for their continued dedication during uncertain times and foster an “open door” policy for additional questions or concerns.

Announcing a Layoff

  • Layoff announcements should be clear, concise, and transparent.
  • It is important to inform the employees about the reason for the layoff and how it will affect them to avoid confusion.
  • If the layoff must be announced via email, the message should be well-written and clearly outline the details of the layoff.\
  • Employees should be notified individually if they themselves will lose their jobs due to the layoff.

Prepare the Environment and Time of Meeting

  • Select an appropriate time early in the day and on a day that is not immediately prior to a weekend, holiday, or scheduled vacation for either the employee or manager.
  • Pick a time that will limit disruption to the business and allow the employee to leave the building with as much privacy as possible.
  • Have tissues nearby and water available.
  • Do your best to leave them with the impression that the company truly cares about them.

Plan for an Employee Response

We all react differently to information that will affect our employment adversely. Laid-off employees are often left in a state of confusion and disbelief when they find out about the news. This can lead to a negative reaction from the employee and a delayed response from the employer. Laid-off employees tend to display a wide variety of reactions, and it is difficult to determine what the specific reaction will be. Run potential scenarios with the management team and be prepared to manage the outcome in a non-confrontational manner.

Don’t forget who Remains

One of the most common missteps is believing everything is back to normal immediately following the announcement. Never forget that there are still a lot of potential obstacles, and some things may never be the same. 

Author: Michelle Smith Schmidt

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