Employee Relations

What Is a Layoff Letter (and Why Tone and Language Matter)

Learn the purpose of a layoff letter, why language and tone are so important, and the best way to structure one with help from LaborSoft.

layoff letter

It is essential when writing a layoff letter to use the proper tone and terminology to avoid the risk of lawsuits, maintain employee relations, and remain in compliance with employment law. Read on to understand the value of an employee layoff letter, what it should contain, and how to write one. You'll also find a sample layoff letter template you can use to get started.

What Is a Layoff Letter?

A layoff letter is a clear means by which you can leave a paper trail while letting an employee go due to a business slowdown, an economic downturn, restructuring, a lack of work, relocation, budget cuts, job automation, inflation, or other reasons for downsizing. 

The importance of a written layoff letter cannot be understated; it leaves a clear record of the communication, which you can keep available in your files should there be any need to refer back to it or produce it in a legal situation. It outlines the reasons why the employee is let go and is a vital piece of evidence that you took all the right steps in the process. Layoff letters may also include a call-back date which is important to the employee when it comes to maintaining unemployment benefits.

Be Clear and Concise but Respectful

The first thing to remember when drafting your layoff letter is to keep your language clear and concise when informing an employee of the reasons for a layoff. In addition, it is essential that you include information about what will happen with benefits, how the employee can collect their final paycheck and any other logistical information regarding the departure.

Along with being clear, keep your language professional and respectful. Language that could be construed as confrontational or insensitive can lead to potential legal troubles if the employee accuses you of an unjust termination.

Structuring Your Layoff Letter

Keep your language clear and concise every step of the way. Start with a direct statement that the employee is being laid off and the reasons for the layoff. Be transparent and honest about legitimate reasons that led to the decision to let the employee go.

Next, express thanks for the contributions the employee made to the company. Acknowledge their dedication and work ethic, and outline the support services the company offers, including career counseling, transitional services, or severance benefits if they apply.

Finally, close out by trying to be positive. Offer the employee your best wishes in future endeavors, and be open to any questions they might have.

Sample Layoff Letter

The following sample layoff letter offers the basics of what your letter should look like. You will need to customize the letter to the specifics of your circumstances. A letter due to an economic downturn, for example, will look different than one related to job automation or company relocation.

Dear [employee],

I deeply regret to inform you that [company] must terminate your position as a [position] effective [date]. We have made this difficult decision due to [reasons for termination], which requires us to reduce our workforce. We want to be clear that this layoff does not reflect your performance or company contributions, which we have deeply appreciated during your time with us.

To help you during this time, we offer [severance pay] and any benefits to which you are entitled until [normal benefits end date]. Your final paycheck will be delivered as normal. If you receive direct deposit, it will be deposited into your account. If you receive a paper check, it will be mailed to you.

We request that you return any company property you currently possess (listed below) to us in a timely fashion.

Once again, we appreciate all of your dedication and loyalty, and we wish you all the best in your future endeavors. Please do not hesitate to reach out to [contact] if you have any questions or concerns.


[your name]

Help From LaborSoft

LaborSoft offers case-based solutions to a wide range of human resources issues, including help with employee termination and layoff letters, to ensure that your business remains in compliance with all laws and maintains efficient operations with strong employee relations and engagement. For more help and advice with organizing your human resources and employee engagement communications, get in touch with us to schedule a demo of our HR case management software today.

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