If you have ever planned a layoff, been personally laid off, or even have started to plan your first reduction event as you are reading this blog, you know that the planning involves a ton of time and stress. That is why we have put together a sample “laid off letter” that you can use to notify your employees of your reduction event.
Now, let’s get into things you should consider before sending out a laid off letter to your employees.
Laid Off Letter: Considerations For HR
When planning a layoff, your human resources team needs to make sure that you have carefully planned out every area of your reduction event.
We have several resources to help you with this planning:
- Layoff Script
- Layoff Memo
- Reduction in Force Checklist
- Layoff Employee Selection Guide
- WARN Act Checklist
And before you pass out the laid off letter to impacted employees, your HR team needs to answer the following questions:
Have we run an analysis on the employees we have selected for reduction to ensure there isn’t disparate or adverse impact?
It is important that your human resources team create a methodology for selecting employees to be let go, and that you have documented the business case for this methodology. Once you have chosen which employees will be let go, then you should have an HR data analyst run an analysis of the employees impacted to make sure there isn’t one single group (race, sex, age) that was targeted unfairly.
If there was, make sure that you have a strong business case for it that can hold up in court. If not, you will need to go back to the drawing board to find a different methodology to find employees to lay off.
Do we have a schedule for the layoff event?
Scheduling is so important when laying off employees. Before you even think about sending out a layoff letter, you need to have a solid schedule that your team can execute.
You need to consider when is the best time of the week to layoff employees for your organization. Typically, if your organization has a normal 9-5, Monday through Friday week, it is best to do the layoffs on Tuesday, Wednesday, or Thursday.
You will also need to know if you are going to layoff the employees early in the morning or towards the end of the day, and if you will allow them to finish out their work day. Every organization has their own preference, and sometimes it makes sense to modify this based on the person you are giving the layoff notice to.
Of course, if you are laying off a huge portion of your staff, this could take all day, so choosing between morning and night won’t be necessary.
Who will conduct the layoff notification?
There are several schools of thought on this as well. It is generally well-accepted that a person should be notified of their loss of employment by their supervisor. However, there can be exceptions to this rule of thumb.
If that person’s supervisor is being laid off as well, it might not make sense to have them carry out layoff notifications.
Some organizations also prefer to have high level management conduct the layoffs so that it seems more personable to the people being let go. When they see the looks of remorse and sympathy on the executive’s faces, they will understand what a tough situation the company is in and then not feel the need to react violently or leave bad reviews on Glassdoor.
Have we exhausted all other options before having a layoff or reduction in force?
It is important that your human resources team assesses alternatives to layoffs. There are several ways your organization can improve your bottom line, including:
- Hiring Freezes
- Travel Freezes
- Budget Freezes
- Reducing Pay
- Limiting Overtime Allowed
- Reducing Work Hours
- Voluntary Layoffs
- Voluntary Retirements
- Unpaid Sabbaticals
First, determine the impact that is needed on your organization’s bottom line, and then estimated the cost savings for implementing all of the above, including a traditional layoff as well.
If there is a different reduction event, or even a combination of a few that could have the same or greater impact than a layoff, it might be in your best interest to try conducting one of those first.
But if you have already tried several of these tactics, or it is of the utmost urgency to lean out your staff, it would make sense to move forward with a layoff.
Now, let’s hop into what you should put in your “laid off letter” once you have decided to have a layoff.
Laid Off Letter: What Should You Include in the Letter?
Like any letter, the layoff letter needs to start by addressing the employee by name and getting straight to the point.
While it may seem like an okay idea to beat around the bush and break the news lightly, it’s not. Nothing you can possible write in this letter is going to make the employee happier to receive it. So, start the letter quickly by saying what is going on.
Something like this:
"Dear [Employee Name],
For the last several months, [Organization Name] has experienced financial difficulties due to economic changes within our industry. In the past years we have taken action to adapt to this new market with new product & processes. Unfortunately, this action has not resulted in increased profitability.
Explain that the company is downsizing due to whatever reason and that their job is impacted. If you want to give a little more detail, wait until the second paragraph.
This brings us to the next point:
The Middle of the “Laid Off Letter”
Okay, so we’re midway down the page now. You can take this time to explain a little bit about why the layoff happened. Just like the layoff meeting - which you will still have to have, by the way. Layoff letters don’t get you out of having a conversation even if they overlap in content - you should explain that this is a move based on X reasons.
Don’t put blame on the employee. Don’t try to console them too much either. Explain, openly, why your company is downsizing.
For example, you could say this from the letter example above:
“Due to this climate, we have come to the decision to eliminate positions within the organization. It is with deepest regret that I must notify you of your position being eliminated from the organization.”
This shows that you care while also telling them what is going on. It consoles but not too much. You’re not in there apologizing and trying to make the process feel better.
When learning how to write a 'laid off letter', the most important thing to remember is that this letter has to be professional, a bit personal, but - most importantly - honest. That means you have to keep a bit of distance in your writing while also knowing when to bring it in.
The Middle: Part Two
The middle actually has two parts to it. (Surprise!) The first, as we just said, is all about alerting the staff member of what is happening and how they are impacted. That part needs to be short and to the point.
You need to transition the letter to setting up the layoff meeting. This involves stating that a member of HR will reach out to the staff member with a phone call to set up a time to go over the layoff process.
Alert the staff member that benefits will be discussed during this meeting. You can let the staff member know that there will be outplacement services included in these benefits in the letter, though, because it lets them know right off the bat that they won’t be going through this transition alone, which can ease tension.
Here’s an example of how this section can look:
“Someone from Human Resources will call you to set up a meeting in the coming days to discuss this process and the overall implications. The HR representative will discuss with you your separation benefits. These benefits include the use of an outplacement service for assistance in finding a new position through resume writing and career counseling services. Please feel free to ask this HR representative any questions in relation to the position elimination.”
You can also add in how severance works, too, if you have a policy on paper. For example, if severance pay is based on how long the employee was with the company, you can reiterate that policy in this letter. Just make sure you don’t end up explaining everything because that’s what the meeting is for and you don’t want to send the staff member a book - just a notification and brief explanation.
HR needs to be aware that people will likely have a lot of questions for this meeting. So make sure you plan out what needs said with a script. Using a script keeps you on task and helps the meeting move forward while also making sure that you listen to the staff member and let them say what they need to say.
Let’s now move to the end:
The End of the Laid Off Letter
This section of the letter is super short. Really, you just want to thank the employee for all they have done at the organization and then sign off.
Again, it’s important to stay on task here. Don’t go on and on after you have explained what needs explained. You can simply end with a one sentence send off and then start to call those who are impacted by the event.
Here’s an example:
“We appreciate all of the good work you have done during your employment.
That should conclude your letter and allow you to send it off. However, you also have to make sure you handle the event in a legal way, which means checking in with your legal team, especially when you are letting go a group or have staff members that are over the age of 40 years old.
Legal Compliance and Layoffs
Knowing how to write a layoff letter is one thing. Making sure you are following all of your local, state, and federal laws is another.
Now, it’s impossible for us to go through all of the different laws that impact various regions of the US. Plus, we are not lawyers.
The best way to handle this process is to work closely with your legal counsel or team to make sure you are doing everything appropriately, ensuring that your organization is not breaking any laws or opening itself up to lawsuits because someone wasn’t let go properly.
If you follow all of the tips here, you will be well on your way to having a well-rounded and well-crafted layoff letter that is ready to be sent to your outbound staff members. We also recommend using outplacement services to make sure the whole process goes over smoothly. You can learn more about those services here.