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M&A: How to Write a Layoff Memo (With a Downloadable Sample)
July 19, 2018 by Josh Hrala
Layoffs are one of the most stressful times for everyone in business. The employees let go are obviously stressed about their next role, how their finances might shake out, and other things. Surviving staff members worry that their jobs might be the next to go. And, HR leaders are stressed about conducting the event.
The good news is that, as HR professionals, you can make the event go over smoothly by simply having a great communication plan on paper before the event occurs. Writing a layoff memo ad-hoc is a great way to increase your stress levels, make mistakes, and have the event cost your organization more money in the long run.
The first step of the process is to announce that a layoff is happening at the organization. This initial communication – also called a layoff memo or layoff letter – needs to be iron clad if it’s to do its job without causing more headaches.
So, without further adieu, let’s jump right into how you can craft a great layoff memo to get the ball rolling on your event.
Writing a Layoff Memo: The Beginning
To make this process as easy as possible, we will start where all stories start: the beginning.
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 (more on this in a second). If you want to give a little more detail, wait until the second paragraph.
Writing a Layoff Memo: The Middle, Part One
The middle consists of two parts. The first is explaining why the layoff happened in the first place. Don’t put blame on employees, don’t try to sugar coat things, just explain that the layoff happened because of X reason.
Maybe the market took a downturn. Maybe new companies are increasing competition and hurting your bottom line. Maybe the move was simply to restructure and get back on the right track with workforce planning. It could be a number of reasons, but you have to let your staff know what the reason was. The real reason, not a lie.
Also, don’t try to console your staff too much in this letter. Have an open door policy so that staff members can come and see you directly to discuss their stress.
Here’s how this section of the layoff memo might work:
“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.”
Short. Sweet. And to the point. It shows you care without bending over backwards to console staff members.
Let’s move on to the second part.
Writing a Layoff Memo: The Middle, Part Two
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.”
In this section, you may also want to explain how severance will work and also if outplacement services are provided. Pro tip: it should be. By providing outplacement and a strong severance agreement, your staff will know that they are in good hands if they are one of those being let go.
As for severance itself, you can go on to explain how the process works, how the pay structure operates, and other things that people might be curious about.
Again, don’t spend a lot of time. This is a memo not a novel, and it should read quickly. Explain that if people have any questions that they can send you an email or meet with you in person to go over the company’s policies pertaining to reduction events.
After you nail this part down, you can move on to close out the layoff memo.
Writing a Layoff Memo: The End of the 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.
The Final Say
If you follow these steps, you will be well on your way to crafting a great layoff memo that will inform your staff of the upcoming events without causing additional stress.
As always, make sure you check in with your legal counsel to ensure that your reduction event is compliant with all local, state, and federal laws. There are many rules and regulations that dictate how RIFs and layoffs need to be handled, especially for workers over the age of 40.
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