Downsizing and Layoffs Policy

What is a Downsizing and Layoffs policy?

A layoff describes the act of an employer suspending or terminating a worker, either temporarily or permanently, for reasons other than an employee's actual performance.

Downsizing is the permanent reduction of a company's labor force by removing unproductive workers or divisions. While it is generally implemented during times of stress and a decline in revenues, downsizing can also be used to create leaner and more efficient businesses.

Employees that will be laid off will be given notice to the greatest extent possible, usually no less than thirty days. All notices of downsizing or layoffs will be issued formally, in writing, and distributed by the Human Resources Manager.

Downsizing or lay off policies allows for the employee to understand all their rights and the processes they need to go through. This usually involves things such as the signing off that they have turned in all company property, submitted their badges, and access pass. For employees who may have company intellectual property from their personal devices, it may also involve confirmation that this has been deleted. It is the responsibility of the Department Manager to ensure that the layoff protocol for returning company property is followed.

Why is a Downsizing and Layoffs policy important?

By using a Downsizing and Layoffs policy you are preventing your company from being liable by ensuring you cover all the necessary information and steps. It also allows your employee to understand their rights in the situation. As well as understanding the next steps in a clear and informed manner in a possibly very confusing and stressful time.

Following a layoff, the position is expected to go unfilled for at least one year. Solely senior managers of the company determine layoffs. The normal employee payment schedule will not apply during a period of company layoffs. This does not mean that employees will not be paid. However, there is a possibility that paychecks may not be issued during a period of layoffs. After leaving the company, medical benefits may still extend while an employee looks for other work. Laid-off employees may be directed to use the Consolidated Omnibus Budget Reconciliation Act (COBRA) to provide continued medical benefits under these circumstances.

Employees that are terminated due to downsizing or layoffs are required to turn in all company property, submit their badges and access passes, and remove any company intellectual property from their personal devices. It is the responsibility of the Department Manager to ensure that the layoff protocol for returning company property is followed.

What is included in a Downsizing and Layoffs policy?

Use this customizable PeopleGoal Downsizing and Layoffs Policy template as an outline for your company’s downsizing policies.

The PeopleGoal Downsizing and Layoffs describes terms for downsizing and layoffs. Simply adjust the information in the brackets to suit your company’s needs.

Disclaimer: The PeopleGoal Policies are general templates and should only be used as a basis for company policies. Please take into account all local, state, and federal laws when drafting your company’s final policies. This is not a legal document or a contract, and PeopleGoal will not assume any legal liability associated with the use of this document.