How to Lay Off Employees? 5 Steps to Conduct a Successful Layoff

Wondering how to lay off employees? It can be a stressful scenario.

The good news is that while holding a reduction in force (RIF) or layoff can be daunting, a well-executed plan can make a huge difference not only to those impacted by the event but also to those who were tasked with carrying out the layoff.

To help you understand the entire process, we put together five key steps you should take to ensure that your layoff event unfolds smoothly. Here are the five steps we’ll cover to help you hold a successful layoff:

• Step One: Enlisting a layoff team consisting of stakeholders and managers
• Step Two: Create a layoff communication plan for every step of the process
• Step Three: Employee selection criteria
• Step Four: Training supervisors and managers
• Step Five: The layoff notification meeting

This might be the most important step in answering the question: “How do you lay off an employee?” Depending on the size of the RIF, this probably isn’t a one-person job.

You will need to assemble a diverse team of colleagues to help. Your (RIF) team should include members of management, HR, legal, and public relations. The RIF team should be diverse in terms of experience, gender, age, race, etc.

This initial team should also consist of all stakeholders involved. For example, senior leadership and mid-level management should all play a role here to ensure that the right talent is retained so that productivity doesn’t take a hit during the event. We’ll cover employee layoff selection in a moment, but this initial stage is where you can pull together the team to help make those decisions.

It is important to have a clear and honest statement about why the reduction in force is happening. This will be very helpful to your management team who are delivering the news.

Employees will want to know why they are being let go. Keep in mind the reason should always relate to a business decision. It is never personal. Choose your wording very carefully. Don’t use terms like “cleaning house” or “trimming the fat.” Think about what would be acceptable for you to hear in their shoes.

While this step may seem too early in the process, it’s really not. When it comes to understanding how to lay off an employee, you need to know the importance of communication because this is the part of the process that impacted employees—and potentially the general public—will remember. We always recommend writing a layoff script to help you and other managers stay on track during the notification.

Your overall communication plan should also contain any email communications you plan on sending (if any). Remember, though, that layoff notifications should always happen in person or on a video call, depending on how your organization operates.

Losing a job is one of the most stressful things that can happen to a person. Delivering the news that someone’s position has been eliminated can also cause a great deal of stress and anxiety. In other words, layoffs aren’t fun for anyone. The whole event is emotionally charged.

So, how do you combat this when you have to lay off an employee then? Planning. Given the stakes—from creating a retention issue with key talent to ensuring your employer brand remains intact to low morale—a plan can make a huge difference.

With a plan of action, clear communication, and support from a professional outplacement provider, layoffs do not have to be as scary as they appear. In fact, understanding how to lay off staff members empowers businesses to make tough decisions that can keep them competitive in the long run.

With the importance of planning underlined, let’s get into the actionable tips you can use to hold a successful layoff.

Next to communication, determining your criteria for laying off employees is one of the most important parts of the layoff process. After all, laying off the wrong employees could impact productivity and trigger the need to rehire roles, which can be a time-consuming and costly process.

Before you make a list, consider offering a voluntary severance package, too. There are several benefits to doing this. Voluntary separations have always had multiple advantages over involuntary programs.

Employees who leave voluntarily are less likely to sue their organization over their separation and are more likely to sign a release in exchange for severance and outplacement services, assuming it is offered. This is because voluntary layoffs typically leave those who leave in a better frame of mind than those who didn’t have a choice in the matter.

After a voluntary offering, constructing your list of impacted employees will likely be different at every organization because every situation is unique. Some organizations use a first-in, first-out policy, which leverages seniority. Others may look at performance reviews. The best way to determine your approach is to educate yourself on employee selection criteria. Whichever way you go, ensure that you are setting up your organization for future success instead of being blinded by immediate cost savings.

Employees are going to come looking for answers during and after the event. Make sure that your managers and supervisors have talking points and answers and that they’re ready to talk. We’ve already mentioned this before, but it cannot be overstated: open communication is important to maintain morale and productivity.

A lack of communication fuels the rumor mill. A little coaching in this regard can go a long way. Saying the wrong thing or giving the impression of passing the blame can cause a situation to elevate very quickly. Your supervisors and leaders should already have an outline of what they can and should say. Having a list of benefits, such as severance and outplacement you plan to offer your displaced workers will help ease some of the discomfort. All of this should be covered in your communication plan before the event occurs.

Part of the overall planning process will be to work with your legal team to ensure your layoff complies with all local, state, and federal laws. While we won’t dig into too much detail here, there are a few key legal issues to consider.

First, is the Older Workers Benefits Protection Act (OWBPA), which applies to workers over the age of 40. In short, the OWBPA protects older workers from age-based discrimination regarding terminations. These laws are complex and should be considered by your legal team before an event happens, especially if you’re letting go older workers.

Another common legal concern is the Worker Adjustment and Retaining Notification Act (WARN), which applies to companies—both public and private—that have over 100 full-time employees. The act comes into play during a “mass” layoff or a plant closure and is meant to give employees and the government fair notice of an upcoming reduction event.

Notifications should be done personally and privately. This is a sensitive and difficult time for your soon-to-be former employees, and it should be treated as such. Prepare a simple script for the RIF or layoff notification meeting. Don’t waste their time; if they have questions, answer them to the best of your ability, but don’t get off topic. HR should be able to help in this situation.

At the same time, you need to remember that even with the best communication plan, your surviving employees will likely be on edge. Reiterating that their positions are secure is a must, but do not say this if you may need to make additional cuts in the near future. One of the best ways to improve morale during a layoff event is by showing surviving employees that those who were let go are taken care of with great severance packages that include outplacement support.

Similar to the question above, communication is at the core of what makes a layoff a success and a failure. Breaking the news and alerting staff improperly is one of the biggest mistakes some companies make.

We’ve all seen mass layoffs take place over Zoom during the pandemic. These companies have had their employer brands tarnished, possibly forever, from these events. Furthermore, customers often do not want to buy from or work with companies that do not treat their employees to the best of their abilities.

So, you should tell your employees about layoffs using by being as open and honest as you can. One-on-one meetings should be helpful with those losing their positions, support from an outplacement provider should be available right away, and you should do everything in your power to break the news in a human, compassionate way. This means avoiding mass layoffs on a video call, emailing impacted employees, or—as some companies have done—removing security access before even mentioning that a layoff is happening.

Layoff communications are best done in person or on a one-on-one video call. Sometimes calls and meetings may have the person’s manager and an HR staff member. Either way, it’s important that this meeting be as private as possible to avoid not only making an entire organization panic but also to respect the outbound employee.

When planning a layoff, make sure your timing is correct as well. Some experts say that Tuesday is the best day to hold a layoff. Others say it’s the end of the week. This type of decision will vary depending on what hours your employees work, what days they may have off, etc.

The end-all-be-all tip for communicating a layoff is to be as transparent as possible, as steady as you can be, and remember to be courteous and to the point.

This is a big one. Remember, layoffs are highly emotional and sensitive. People are going to be on edge. So, it’s important that whoever is delivering the notification handles it with grace and compassion without sympathizing too much, which can get your company in trouble.

Layoff notifications should be done in person or on a video call if your company is remote. They should be held by HR and the manager. As we mentioned above, a script comes in handy here as it may be difficult to remember what points you need to hit.

The meeting should also be short and to the point. Deliver the news, give a reason for the layoff that isn’t personal or demeaning, allow the impacted employee to respond, and alert them of the next steps, such as severance and outplacement. While that seems like an oversimplification, that is the core of a solid, by-the-book layoff notification.

When crafting your script, ensure that you pay close attention to the language you use and attempt to see the situation from the point-of-view of the person across the desk or on the other end of the phone.

In the end, layoffs are a stressful time for everyone at an organization. To ensure that the event runs smoothly and that you retain key talent while also getting back on the right footing, clear communication and proper planning go a very, very long way.

The key to becoming an expert in how to lay off an employee is all about communicating with stakeholders, planning the event by looking at all sides of the issue, and then executing the plan with everyone in leadership and management on the same page. If done correctly, you can seriously diminish the stress and the risks to employer brand that can come with layoffs and RIFs if they are not performed properly.

Raymond Lee

Raymond Lee is the President of Careerminds, a global outplacement company based in Wilmington, Delaware. He has over 20 years of human resource, outplacement, and career consulting experience. He has his bachelor’s in psychology and holds a Master’s Degree in Industrial/Organizational Psychology from Louisiana Tech University. He is active in SHRM and ATD. Raymond’s been featured on SiriusXM Business Radio, CareerTalk, and the Wall Street Journal and he’s published a book titled, Clocking Out: A Stress-Free Guide to Career Transitions.