What Is a Layoff Letter? (With Template and Examples)
Updated November 8, 2022
Organizations may lay off employees for various reasons, such as to reduce operational costs, relocate, close the business, or merge with another company. Regardless of the reason, writing to the concerned employee shows professionalism. Knowing what a layoff letter is, what it contains, and how to write one can help you convey the decision politely and effectively. In this article, we explain what this type of letter is, discuss why writing one is important, and cover the steps to write a letter of your own.
What is a layoff letter?
A layoff letter informs an employee that their employment is ending due to no fault of theirs. Temporary layoff can occur if an employer wants to re-hire the employee in the future. Otherwise, the layoff decision is permanent. While some company leaders leave out the reason, knowing it can help an employee understand the situation better and plan for the future.
For example, if the decision is because of an increase in automation, an employee can decide to develop more technical skills or change careers. While a physical copy of this letter is acceptable, many organizations convey this decision in emails.
How to write a letter for a layoff
Follow these steps from start to finish when writing this letter:
1. Use a professional format
Start by writing your name and contact details. Follow this information with the letter's date. Then include the recipient's name and contact details.
2. Write a professional salutation
Next, use salutations, such as "Dear," and "Hello" before the recipient's name. If you're sure of the employee's preferred designation, you may include it after the salutation. For example, the recipient may use prefer certain designations, such as "Mr." or "Ms."
Related: How To Write a Professional Email
3. Mention the notice of layoff
In the opening paragraph, inform the employee of the company's decision to lay them off. Include the last day the company expects the employee to be at their position. Then, state whether the decision is permanent or temporary.
4. State the reason for the layoff
The second paragraph is a good place to explain the company's decision. You can also use this section to give more insight into the situation. For example, you can explain that the temporary or permanent layoff is not due to the employee's work performance.
5. Explain the next steps regarding employee benefits
In the third paragraph, outline what benefits the employee can expect until their final day at work and whom to contact to receive them. For example, they may need to reach out to human resources personnel to discuss severance pay. Severance pay refers to a payment package offered to employees discharged from service. Unused leave days and salary owed are also topics to discuss in this paragraph. Also, explain the procedure for returning company property, such as keys, ID badges, parking passes, and phones.
Read more: What Is Severance Pay in Canada?
6. Appreciate the employee's contributions
Next, thank the employee for their work. Also, offer to help with any questions they may have about the layoff process and whom to contact for more information. Doing this shows respect.
7. End with a complimentary close
Use a professional sign-off, such as "Sincerely" or "Regards" to end the letter. Follow this with your name. Finally, include your signature and designation.
Tips for writing a layoff letter
Use these tips when writing this letter to an employee:
1. Be direct and professional
Ensure you convey the decision early in the letter. Doing this can help to avoid misconceptions. For example, starting a letter for a layoff by thanking the employee may mislead them into thinking the letter is about a promotion or salary increase. Also, use a formal tone when crafting the message. A formal tone involves writing words in full, avoiding slang terms, and emphasizing facts instead of opinions.
2. Consider communicating the information in advance
Informing an employee of the decision verbally before writing the message can help them manage their emotions and respond appropriately. It shows that you value the employee. Scheduling a meeting with the employee can also help you explain the company's reasons extensively. That way, you wouldn't need to include all the details in the letter.
3. Show empathy
While being direct is important, try to show empathy with your words. For example, instead of focusing only on the company and how laying off employees would help in reaching its goals, emphasize the employees' work and contributions. Offering support is also a good way to show empathy to the concerned employee.
4. Review your message
Ensure you confirm the details in the letter before sending it. For example, check whether you made a mistake regarding the employee's last day of work. Also, review the letter for grammar and spelling errors.
Template for a letter of layoff
Here's a template to use when drafting this letter:
[Your contact details]
[Date of writing]
[Recipient contact details]
Dear [Recipient name],
I regret to inform you of the decision of [company name] to lay you off from your position as [position name] effective [last day of work]. Consider this layoff as [temporary or permanent].
A recent [reason for layoff] requires [company name] to lay you off. Please note that this layoff does not relate to your performance in the workplace.
Following your contract's details, you will receive [salary owed] as your salary and [amount of severance pay] as severance pay. You will also continue to receive [employee benefits] until [date benefits end]. Kindly return the following company property [list of items to return] by [return date].
Thank you for your contributions to [company name]. If you have questions about the layoff process, kindly reach out to [contact name] for more information.
On behalf of [company name], I wish you the best in your future endeavours.
Examples of layoff letters
Here are two samples of these letters:
Example 1: Temporary layoff
This example contains a letter to an employee that an organization intends to re-hire:
July 16, 2021
I regret to inform you of the decision to lay you off from your position as maintenance manager at FFF Inc. Consider this layoff temporary and effective July 31, 2021.
Recently, GKI Inc. decided to merge with another industry leader. This decision required upper management to lay off the maintenance team while it restructures the engineering department. Please note that these layoffs do not reflect your team's performance over the last quarter.
You will receive your complete pay for the month and 5% of your yearly income as severance pay, as outlined in your contract. Also, you can continue to use the company's library and medical facilities until July 30, 2021.
Kindly return the following company property by July 30, 2021:
I want to thank you for your service and express the company's hope for continued collaboration in the future. If you have any questions about the sections outlined above, kindly reach out to Mary Johnson, the human resources manager. Mary Johnson will also contact you on the next steps following the temporary layoff.
Good luck in your future endeavours.
COO, FFF Inc.
Example 2: Permanent layoff
This example contains a permanent letter for a layoff:
Baker Lake, Nvt
March 14, 2021
Baker Lake, Nvt
Dear Ms. Ayeo,
I regret to inform you of upper management's decision to lay you off from your position as a cashier. This decision is effective March 31, 2021, and permanent.
Lack of funds necessitates this lay off from TER Company. Following the terms in your job offer, you will receive your complete pay for the month and 3% of your annual income as severance pay. Please contact Jovan Palmer for more information concerning how you will receive this income.
On behalf of the leadership team, I apologize for the circumstances that made this notice necessary and permanent. Thank you for your work over the past year. You can reach out to me if you have questions about this letter's details.
Sales supervisor, TER Company
Please note that none of the companies mentioned in this article are affiliated with Indeed.
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