How to write a layoff letter

Layoffs are a fact of life for a lot of companies and can happen to any business. Whether it’s due to financial issues, a move to streamline the size of the company, or a pre-emptive round of redundancies due to workforce planning reasons, there are tons of triggers that can lead to a reduction in the labour force. It’s not something that any employer wants to happen, but sometimes it’s inevitable or unavoidable so you have to make the best of a bad situation. For that reason, and in order for things to go as smoothly as possible, it’s good to understand the right way to approach drafting a layoff letter that is both legal and ethical.

Having to tell employees that their jobs are being affected by a layoff can be stressful at the best of times. Being truthful with them through meetings and an official letter is the best way to approach this. This article is all about how to write a layoff letter that gets the job done, whilst also addressing the employee in the best way possible. 

As with all letters, a layoff letter should start by addressing the employee by name and getting straight to the point. There is no point in beating about the bush, as that will only make things worse. Nothing that you can write in this letter is going to make the employee happy to receive it, as it will mean an upheaval for them. 

So, start the letter by letting them know what is going on.

For example:

Dear [name of employee],

For the past few months, [name of the company] has experienced financial difficulties due to various economic changes within our sector. In past years, we have been able to take steps in order to adapt to this new market with innovative new products and processes. Unfortunately, this action has not resulted in a rise in our profits.

Due to this, we have come to the difficult decision to make reductions within the workforce. It is with great regret that I must inform you that your position is now no longer required.

Explain to each affected member of staff that the company is downsizing and that their job is impacted. If you feel bound to give more detail, do this in the second paragraph.

In this section, you can take time to explain in more detail why this is happening. If you’ve already conducted layoff meetings, where certain information will have been discussed, this part of the layoff letter can reiterate what’s already been covered.

If you haven’t had any meetings, don’t think you’ll be let off the hook by only sending a layoff letter. That doesn’t get you out of having a face-to-face conversation, which is the most professional way of approaching this difficult situation. Don’t blame the employee, or try to console them, but be honest about what’s happening. Give a valid reason as to why your company is reducing in size and why it needs to make redundancies.

For example:

Because of a recent restructure, [name of company] is closing down several departments, including our Finance & Services department.

This shows that you care, by telling them what is going on in as straightforward a manner as possible. It’s all about hitting the right tone by remaining professional, a bit personal, but – most importantly – being honest.

This is when you want to thank the employee for their hard work. While this doesn’t lessen the pain of being made redundant, it will show you appreciate their time with the company.

For example:

We would like to thank you for all of your hard work over [number] of years. You have certainly made a difference within the finance department and we extend our gratitude to you for your dedication and unfailing loyalty.

Now we come to the practicalities of what will happen next for the employee and if there’s anything they need to do in the meantime. You also need to inform them of an up-and-coming meeting to discuss the matter further. This involves stating that a member of HR will reach out to them to set up a time to go over the layoff process.

Let the staff member know that any due benefits will be discussed during the meeting. You can also inform them what the outplacement services situation is, so they know they won’t be going through this career transition on their own. This can go some way to lessening any tension or awkwardness.

Here’s an example of how this section might look:

A representative from HR will be in touch to set up a meeting in the next few days to discuss this process and any implications and benefits, as well as to answer any questions that you might have. The benefits include the use of outplacement services to assist you with securing a new position as soon as possible, by helping with crafting an updated CV and offering career counselling.

You can also add in information about a redundancy package if your company has this policy. For example, if severance pay is based on how long an employee worked for the company, you can mention that in the layoff letter. There’s no need to explain absolutely everything in the letter, as that’s what the meeting is for. The layoff letter is a notification of redundancy with a brief explanation.

The HR department will need to know that departing employees are likely to have a lot of questions at the layoff meeting, so plan what needs to be said with a script. Sticking to a script will keep you on task and will help move the meeting forward, while making sure that you listen to the staff member and let them have their say.

It’s important to stay on task here by keeping it short and sweet. All that’s needed is a simple sentence, thanking them again for their work, and then signing off. There’s no need for anything else at this point.

Here’s an example:

We appreciate all of the good work you have done during your employment and wish you the best of luck for the future.

Kind regards,

[Name of executive]

That concludes your layoff letter.

Once you’ve got the draft of a layoff letter completed, you need to make sure you’ve handled the event legally so far, which means showing the letter to your legal team. This is so they can check it over before it’s sent out to impacted employees. While we can help with how to draft a layoff letter, we’re not lawyers, so it’s imperative that you get this dome in good time.

The best way to handle the redundancy process is to collaborate closely with your legal team so you know you’re doing everything appropriately and ensuring that your company isn’t breaking any UK laws or opening itself up to lawsuits because someone wasn’t let go properly.

If you follow all of the guidance in this article, you’ll be well on your way to having a well-rounded and well-crafted layoff letter that’s ready to be sent to departing staff members. We would also highly recommend using outplacement services to make sure the whole process goes smoothly, as there are many benefits to having this service.

Learn more about our services, including the costs of outplacement, here. 

Having a well-crafted layoff letter can make the redundancy process go smoothly. Instead of having to compile a letter every time you let employees go, you can come back to your template, make the necessary tweaks, and send it off without all of the stress.

Your template must be customised to fit in your company’s culture, because a layoff letter shouldn’t be a one-size-fits-all document. However, the core message and intent of the letter remains the same. Starting with a great core will put you on the path to success.

If your organisation is considering outplacement services, contact us at the earliest opportunity to find out more.

Elizabeth Openshaw

Elizabeth Openshaw has over 12 years of experience in the job search sector, including extensive expertise in outplacement and CV reviews. Previously a Journalist on national publications, she is Director of her own company, OpenDoor CV Expertise Ltd. You can connect with her at Elizabeth Openshaw | LinkedIn.