No one wants to hear the word "layoff" in an employment setting. When business isn’t great and your back is against the wall, you may need to write a layoff letter to one or more employees. Because a layoff is significantly different from a termination for cause, you can word the letter carefully to give the employee important details about reasons behind the decision. Although it won’t change the outcome, your wording may make the bad news a little easier to take.
Place the current date at the top of the letter. Skip one line and place the employee’s name and address as an inside address. Skip one line and place a subject line with the words, “Layoff Notice” or “Reduction in Force.”
Write a salutation directly to the employee, addressing her by name. For example, you might write, “Dear Angela Norman.”
Open the letter with a brief overview of the company’s history and its successes. Transition into current financial difficulties that are affecting the company. If you have quarterly reports or financial data, share the bottom line from this financial data that makes it impossible for you to continue to operate under current staffing levels.
Explain the specific cuts you plan to make in operating expenses to keep the business afloat. Share the total number of jobs you will eliminate and the savings this will incur for the business. Inform the employee that her position is one of the positions that you have decided to eliminate.
Describe the difficulty you’ve had arriving at your decision. List the employee’s severance benefits. Share resources in place that will assist employees in finding new employment.
Inform the employee of the effective date for the termination. Provide a contact name and telephone number for the employee to contact with questions or concerns. If you are enclosing a packet of information – including severance information — mention the information as an enclosure. Close the letter by thanking the employee for her dedicated service.
Add a closing such as “Regards” or “Sincerely.” Skip four lines and type your full name. Skip two lines and add a notation about any enclosures.
Use company letterhead for the letter to create a formal business letter. Send the letter at least two weeks prior to the effective date of the termination to provide the standard notice of termination. Provide as much open communication and support as possible during the transition period as laid-off employees are preparing to leave. This helps support both the laid-off employees and the ones who are staying.