Corporate Layoff Procedures

Corporate Layoff Procedures
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Establishing corporate layoff procedures enables management to move quickly and efficiently once the need to lay off employees occurs. Productivity decreases once the rumor of layoffs starts, so avoiding delays minimizes the disruption. Layoff procedures allow companies to streamline operations and eliminate positions as well as remove individuals who lack the skills to complete current job tasks effectively. A robust corporate layoff policy can also be the catalyst for other cost-saving measures, such a reductions in office space, travel expenditures, and other business expenses.

Defining Severance Package Details

A clear corporate layoff procedure provides an employee with details about any applicable severance package and the amount of time he can expect to receive payments. Large companies with cash reserves typically provide generous severance packages to reduce head count in the organization, while improving their profit and loss statement. Corporate layoff procedures usually give former employees transitional support, such as job counseling, resume development, and job search guidance. Career transition services decrease the negative impact by helping people find new employment.

Conducting the Layoff

In general, a manager should ask to speak to the employee and give the news in the presence of an HR staff member. Typically, Fridays tend to be the best day to conduct a layoff, because the week is over. The manager should state the reason for the layoff, such as cutbacks due to lack of funds, reduced work, or organizational changes. If the person is being dismissed that day, the manager should then allow the person to gather his belongings, say goodbye to his colleagues, and then walk him to the door. In larger companies, employees may have the opportunity to remain at the company and seek a job in a different department. Remaining employees may experience some guilt about surviving the cut, worry about the next cut, and wonder if the company will remain solvent, so communicate regularly about workforce reduction plans.

Describing Additional Terms

Procedures for managing corporate layoffs include defining the terms of the severance package, including financial details and health coverage. The Consolidated Omnibus Budget Reconciliation Act (COBRA) health benefit provision allows certain former employees and their beneficiaries the right to temporary continuation of health coverage at group rates. Other procedures describe comparable positions – for example, in the same geographic location – available to the employee, and the time frame allowed for an internal job search.


Corporate layoffs are never easy, for employees or managers. Use these tips to avoid unnecessary problems from occurring at an already stressful time. Helping employees find the resources they need to get new employment as quickly as possible helps ease the blow of losing a job.

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