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There are numerous reasons for an employee to get demoted. Whether it’s because of poor performance, a restructuring at the company, or even if the person requests to take on less responsibility, you will always have to conduct the move in the same way, starting with a demotion letter.
Using a demotion letter, even if the move is mutually agreed upon, keeps everything running smoothly, and allows you to ensure that demotions are handled properly – with the right communication – across the board.
This guide will teach you what you need to include in your own demotion letter by using a sample, which you can download and customize for when you need it.
You can download our sample demotion letter here:
Now, let’s jump right in.
What Is a Demotion Letter?
A demotion letter is an email, memo, or other document that alerts a staff member that they are being demoted to a lower title or role.
There are lots of things to consider when demoting an individual, such as how much they will now be paid, what their actual job responsibilities are, how they will react to the move, and things of that nature. You need to make sure you work with your internal teams to understand all of the repercussions that can come with a move like this before you implement it.
That being said, a demotion letter is rather straight forward and is probably the easiest part of the overall process. Like any announcement letter, you really just need to give high-level details, explain what is happening in clear, concise language, and then offer a way for the employee to reach out for more information.
Demotion letters, like layoff letters, should get right to the point without all sorts of flowery writing. You aren’t trying to make small talk in these correspondences or beat around the bush. Just jump right in.
With that in mind, we’ve broken down the letter into parts to make it easier to customize.
A Demotion Letter: The Introduction
Most likely, your demotion letter will take the form of a memo, following the standard practices that come with a document of that nature.
So, to start off, put contact information at the top, such as your company name, the date, time (if needed), and a subject line. Then, jump into a typical letter format that starts by addressing the employee you are talking to.
This section of the demotion letter can look like this:
[Company Name]
[Date]
[Time]
Memo: New Role at [Company Name}
Dear [Employee Name],
Pretty straight forward, right? All correspondence at your organization probably takes on this look (at least when it is official and has impact).
Next, you can move into the middle of the letter where you explain what’s going on.
Writing a Demotion Letter: The Core Message
Before we show what this section can look like. We need to note that this is where a demotion letter and other letters – like a layoff letter, salary reduction letter, etc – differ.
Unlike those letters, a demotion letter comes AFTER a meeting. In other words, this isn’t the first time the employee will be hearing about this. You need to work with the employee before you send an official letter so it doesn’t catch them off guard. If you don’t, you run the risk of your employee straight up leaving your organization, which you probably want to avoid.
So, in the meeting, go over how the move will work and what is to be expected. Then, follow up with a demotion letter that will serve as the official notice to the employee and will go on file.
Okay, with that out of the way, the actual middle of the article – which contains the core messaging and details of the move – is, again, straightforward.
Start by getting right to the point like this:
“This memo is to follow up on and summarize the conversation we had regarding your your change in [clarify if it is a change in role, title, reporting, compensation, etc].”
Please note, the parts in brackets are there for you to fill in with your own information since every organization is different. When you use a sample demotion letter – or any sample letter – you need to always make it your own.
After this initial information, move into what will be new for the employee. How their role will change, what their title is, who their manager is, what their pay is, etc. Again, just stay on track and keep it very simple and clean.
“Your new [clarify what has changed] will begin on [date]. You will report to your new manager, [insert manager name].
Your new [salary/bonus/commission/etc] will be effective on [date]. (or let them know their overall compensation package won’t change).”
After this information is passed on, you can move to the closing of the letter.
Writing a Demotion Letter: The Sign Off
Since you have already had the meeting with the employee before actually demoting them, the letter should be pretty straightforward and easy to process, though you may want to include a way for the employee to reach back out to chat about all of the changes to ensure that they are fitting into their new role.
If you just want to keep the letter high-level, you can move on to the closing.
Just like any letter – even those written to people outside of a business setting, you need to sign off.
This part of the demotion letter can look something like this:
“Regards,
[insert signature]”
We also suggest that you have the employee sign off on the document to ensure that they not only received it but read it, too.
To do that, just insert a small area at the bottom of the letter that looks something like this:
“Employee Signature: [have them sign here]”
Writing a Demotion Letter: The Takeaways
When it comes to writing a demotion letter, you should already have all of the details figured out and ready to be listed in the notice because you have already talked with the employee who has already agreed – at least verbally – to the move.
Once that is done, your letter just needs to explain what happened in that meeting and how their role within the company will change now that they have a new title.
We always recommend to make a letter like these as short and to-the-point as possible to ensure that your employee cannot confuse details.
If done correctly, your demotion letter should go off without a hitch. Also, as is always recommended when something like this occurs, if you feel like there are legal repercussions to the move, always talk with your legal team to ensure you are following all local, state, and federal laws. We are not lawyers.
Want to download our sample demotion letter? Click below.
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