Is your organization is going through a rough time? And is your CEO asking you to contain costs? Since payroll is usually one of the top company costs, you’ve probably been asked to eliminate some jobs to improve the bottom line.
Or, maybe your organization has had a shift in strategy, and your executive team has decided to completely eliminate a part of your organization that is no longer profitable.
These examples, as well as many others in the current landscape of business, arise the need to have a solid position elimination letter available for your human resources team.
There are several parts of a position elimination letter that we will cover:
- Explanation for the position elimination
- Notification of the recipient’s position being eliminated
- Instructions/next steps in the position elimination process
- Company appreciation and empathy
Let’s get started.
Position Elimination Letter: Introduction
This part of your letter will be one of the most simple. (Which is great, because the rest might get a little difficult depending on the situation!)
As with any letter, use a salutation to start the note. Use simple language that matches the tone of your organization and that of the event. If your company’s brand is very serious, it probably doesn’t make sense to open the letter up with “Hey dude…”.
On the other hand, if you go too formal with the salutation it will seem impersonal. If that goes against your brand, you should avoid using “Dear Mr. John Henry Smith” or “Dear Sir”.
With all communications, people can find it very impersonal to not include their actual name in the greeting. How many times have you gotten a sales email that says “Hey there,” and you ignore it for that exact reason?
Just to be safe, I would recommend something like “Dear John” or “Dear John Smith”.
Step One: The Explanation
In this section, you will want to give a summary of why your organization is conducting a position elimination. The content of this section will vary depending on why you are actually letting go of these employees.
Similar to the situation described above, there are tons of different reasons for a position elimination. If you are writing the position elimination letter for a large group of employees that are being let go because of downsizing, the letter will be different from one written to a small group of chemical engineers whose specific expertise is no longer needed.
This simple formula can be used regardless of any situation:
- Acknowledgement of financial issues
- What the organization has done to prevent the position elimination(s)
- Outcome of these actions (acknowledgement that they didn’t work)
Here is an example that would be relevant to an organization experiencing a mass position elimination:
“For the last several years, Jayhawk Manufacturing has been experiencing fiscal difficulties due to industry changes. We have explored several options, including introducing new products, limiting overtime, and rebranding. Unfortunately, these strategies did not succeed in meeting our company’s financial goals.”
And here is an example that would be sufficient for eliminating a specific group of people due to a change in strategy:
“As you know, over the last five years, the domestic manufacturing industry has changed greatly. Because of this, it is no longer profitable to manufacture lead pipes. We have tried several different strategies to make this manufacturing process profitable again. Unfortunately, none of those have succeeded.”
You should customize the letter to the situation, similar to the examples above. Each position elimination event is different so your letters should respond accordingly.
It is also common to have several different types of letters for a single event. This could make sense if you were eliminating across the entire organization and also targeting a specific department because of strategy changes.
You could also eliminate employees from positions, but also be interested in retaining them at your organization in a different role. In this case, you would want to send a completely different letter that explains that while their position is being eliminated, the organization is open to letting them apply to other internal roles.
This section of the position elimination letter should also be carefully reviewed by your legal team. You might be in various legal contracts with vendors that prevent you from calling any ventures unsuccessful. If your letter is leaked to the press, harsh language may also cause investors to worry. Said worry could then cause investors to tank stock prices or pull out of a venture.
Step Two: Notification of Position Elimination
This next section is the main focus of the entire letter: delivering the news that the employee’s position has been eliminated..
It should be a little bit like a balancing act. You don’t want to provide no supporting information and come off too formal and unsympathetic, but you also don’t want to go over the top in providing information. This can make you seem ingenuine, annoy employees, and cause legal complications if in anyway it shows a sign of wrongdoing.
Here is a simple formula for handling this section:
- State again that you have exhausted all options
- Explain exactly how many positions have been eliminated (customize based on the situation)
- Notify this employee that their position has been eliminated
You can customize step number 2 by including more information about the type of positions that have been eliminated. I wouldn’t recommend doing this if you are making broad cuts across the entire organization, but it might be helpful to provide context that your entire software development team has been eliminated.
Here is an example:
“After exhausting all of our options to improve our fiscal state, we have concluded the next step will be eliminating all 8 positions on our software development team. It is with our deepest regret that I write to inform you that your position is one of these that will be eliminated.”
Step Three: Instructions and Next Steps
The next section of your letter should contain instructions for the employee being let go of what will come next in this process. It is important to be as clear as possible to ensure that you don’t have any complications.
Providing these next steps is also somewhat consoling to the person being let go, as it provides a road map for the next few months as they face this major change in their life.
Here are the items you should include in this section of the position elimination letter:
- When the HR team will be calling the employee whose position is being terminated, or if the employee needs to reach out to HR to discuss next steps.
- Provide awareness that this employee will be getting separation benefits, and that those benefits will be discussed with HR.
- Notify the employee that they will be provided an outplacement program, and include a short description as to what this is, since most of your employees may not be aware of it.
Here is an example of this section:
“Our HR team will have a representative call you in the next 3 business days to discuss the next steps in accordance with your position being eliminated. During this conversation, your HR representative will also discuss with you your separation benefits. A full service outplacement program is included in these benefits. This program will pair you with a career coach to assist in your job search process. Our outplacement providers get people back to work in as little as _____ weeks.”
Being notified of having your position eliminated can be very scary. Sharing information about the outplacement program, and the success that it has, in the position elimination letter can help mitigate negative reactions and decrease anxiety among your employees.
Step Four: Company Appreciation and Empathy
While many organization find this section of the position elimination letter optional, we recommend requiring it, regardless of the type of event. This is for several reasons:
- Most positions that are eliminated from an organization affect employees who have put in hard work.. They aren’t being let go because of horribly poor performance that led to getting fired. They deserve some empathy since these events might have been out of their control.
- Employer branding is more important than ever. When someone leaves a bad review of your company, it stays online forever. This can make your hiring and even your retention plummet. Providing this appreciation and empathy, while not fixing this problem, can lessen the the occurrence of it.
- Finally, providing some sort of appreciation and empathy can lessen the short term impact. It can show employees that you really care and understand the huge impact this haves on their lives, while decreasing the chance of workplace violence or theft that can occur after a position elimination.
This section doesn’t have to be extremely long either! Just a sentence or two can convey the point.
Also, make sure that your legal team reviews this portion of your letter to make sure that you aren’t admitting to any wrongdoing.
Here is an example:
“We appreciate all of the hard work and and effort that you put in during your employment at ______. Thank you for all that you have done.”
Step Five: Signature
While some may think this is the simplest part of a position elimination letter, it can actually have some pretty tricky areas.
These tricky areas mainly concern this one huge question: who should the position elimination letter be written from?
Human Resources? The CEO? The employee’s direct manager?
There are pros and cons to all of these options.
I would recommend staying away from having HR sign the letter. That seems very impersonal to an employee, almost like they are just a cog in the wheel receiving an automated letter.
If you have the CEO sign the letter, it shows that the entire organization understands how impactful this position elimination is. Some employees may find this disingenuine because they know that CEO probably has never seen this letter, and that they have never even spoken with him or her before. If you do want to go with having the CEO sign the letter, I would recommend having the employee's manager deliver the news in person, with the letter, to make sure it feels personal and empathetic.
Having the employee’s direct manager sign the position elimination letter is definitely the most personal, but if you are eliminating several positions, it can result in a coordination nightmare. And if the employee’s direct manager is being let go as well, this type of notification won’t work.