March 05, 2018
Back to Basics - Termination or Layoff


Blog > Back to Basics - Termination or Layoff

The terms reduction in force, termination, layoff, fired, and RIF are often used interchangeably, and while a few do mean the same thing, they actually fall into two very different and distinct categories. The basic difference being if the employee had any fault in the decision to discontinue employment.

  • Reduction In Force (RIF), Layoff - The company has made a decision that it needs to reduce its workforce, often for the financial health and stability of the company. The employees who are let go are usually chosen based on solid objective criteria, as opposed to individual merit.
  • Termination, Being Fired- The company has decided that an employee should no longer work for the organization based on the employees action or inaction.

Losing your job through no fault of your own is a layoff or reduction in force (RIF). While these words are often interchangeable, there is a history of each having its own unique meaning. Traditionally, (1980s traditionally), a layoff is a temporary loss of employment, such a a furlough. With a layoff, It was anticipated that at some point you will be called back to work. A reduction in force or RIF, is a permanent reduction in headcount. However, today these words are usually used interchangeably, and a layoff is commonly a less formal way of saying reduction in force.

Companies will often use a Layoff (or RIF, Reduction in Force) when they are unable to financially support their current workforce. Perhaps a planned project or expansion did not go as anticipated, there is a location closing or perhaps jobs are being reallocated to another workforce, like robots. When the company chooses which workers to let go, they do so in a manner that has less to do with the individual merits of the people, and more to do with which jobs are no longer needed. In cases where multiple people occupy the same job category, but only some need to be let go, companies can look at objective solid criteria, such as date of hire, when making the determination of who should stay and who should go. The science of determining who should be let go during a reduction in force is not something that should be taken lightly. It is extremely important to weigh all factors in your decision and analyze the results of your choices, prior to making any decisions.

Termination or being fired occurs when the employee did something that resulted in a loss of employment. Almost every state in the United States, except Montana, has “At Will” employment. This simply means that, unless you have a contract, employers (or employees) can terminate their employment at any time, without or without cause, as long as it is not for discriminatory reason. In most instances, companies will terminate employees who are underperforming, not following policies, or are a threat to the health and safety of the business or other employees. Terminations are also a delicate science and should never been entered into lightly. It is important to always have solid documentation that supports up your thought process and final decision.

Whether terminating or laying off one or multiple employees, it is always important to understand exactly what is taking place. More importantly, however, is ensuring there is clear communication to the employee or employees on why this is happening. Above all else, always make sure everyone is treated with the empathy and respect they deserve.


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