How to write a layoff letter (with example)

Any company can be affected by layoffs. The layoffs may be due to downsizing, relocation, financial issues, or many other reasons but, for them to conclude positively, the right processes need to be followed. One of the first steps to take is to issue each affected employee with a layoff letter that is both empathetic and legally compliant. 

For anyone in the position of coordinating a layoff, informing people that their job no longer exists can be stressful and upsetting. One of the most professional ways to handle it is via a meeting and a letter. When you’ve held a meeting informing individuals of the retrenchment, they are likely to be feeling overwhelmed and experiencing a mixture of emotions and concerns. Issuing a letter, stating the facts in a caring manner, ensures that they have something to refer to as the news sinks in. 

In this article, we’ll look at how to write a professional layoff letter in a way that focuses on the employee. Let’s dive in. 

As a layoff letter is a formal communication from the business, it needs to be laid out in standard letter format. Use headed paper, add the date, and address the employee by name. 

It’s important to get straight to the point. It may be tempting to dance around the issue to avoid the bad news, but that’s never a good idea. At a time of overwhelm and upheaval, receiving anything other than a straightforward, to-the-point communication is going to seem confusing or disingenuous. Start by immediately stating the situation. For example: 

“For some months now, ABC Enterprises has been facing significant financial difficulties, due to a combination of the current economic climate and lower than expected sales. Actions we have taken so far to address this have not yet been successful. Therefore, we have come to the difficult decision that we need to eliminate some positions within the business. It is with deep regret that we must notify you that your role is being eliminated.”

This paragraph makes it clear that the organisation is downsizing for commercial reasons and that the reader’s role will be made redundant. 

The body of the layoff letter can be divided into two paragraphs. 

Firstly, you can take a moment to dive deeper into why the layoff is happening. Even if this was explained in the layoff meeting, it’s worth reiterating here so that the employee has it in writing and doesn’t need to rely on their memory when they’ve been hit with some unexpected bad news. 

Note, though, that the layoff letter doesn’t replace the meeting – it just reinforces it. While it can be tempting to avoid difficult conversations, sometimes they just need to be had in order to treat people well. 

In both the meeting and the letter, be careful to avoid placing any blame on the employee. Similarly, don’t try to make them feel better with thin excuses and baseless reassurances. Explain that it is a commercial decision, driven by factors other than individual members of staff. For example: 

Even if you know the employee well, keep the letter professional rather than personal. Most importantly, stick to the facts and the truth. 

Now that you’ve explained the situation and the circumstances around it, it’s time to clarify what will happen next. That could be as simple as stating that a member of the HR team will be in touch by a certain date to set up a meeting, or sharing details of where they can access further information or support. 

The Ministry of Manpower states that employees must be notified of their retrenchment in line with the terms for termination in their employment contract, so this is the ideal time to briefly outline their notice period and any benefits they will be offered. You will need to discuss this in greater depth during the follow-up meeting. 

This part of the letter is a great time to let departing employees know that they will be provided with outplacement support, so that they know from day one that they don’t have to navigate this transition alone. This offers reassurance to someone who has just been hit with bad news. 

For example:

You may also like to signpost the employee to any relevant policies the organisation has in place. There’s no need to go into great detail in this letter – it’s simply confirmation of the retrenchment and a summary of next steps. 

It’s likely that, having received the news in the meeting and digested the contents of the layoff letter, employees will come to the HR meeting with many questions. It’s worth being well prepared for this and even bullet-pointing a script to keep the meeting on track and moving forward. That said, it’s also important to know when to let the employee speak and ensure their voice is heard. 

The end of the letter can be quite short. You just need to thank the employee for their contribution to the business and sign off. There’s no need to dwell on any details here. For example: 

Now, it’s time to check and proofread the letter before sending it off or handing it out. You may also consider running it by your legal team, to ensure nothing has been overlooked and all requirements are covered. That will give you peace of mind and help you to avoid potential lawsuits, whilst also preventing confusion should an update be required at a later stage. 

To ensure the entire layoff process runs smoothly, we recommend working with an outplacement provider.

With the tips and suggestions above, you should be in a position to craft a well-thought-out, empathetic, and legally-compliant layoff letter to your departing employees. Putting it all together, here’s an example of a layoff letter that you can tailor to the requirements of your business: 

For further outplacement support, and to find out if Careerminds is the right outplacement provider for your business, arrange a chat with one of our experts. 

Jen David

Jen is a careers writer and CV specialist, with over 13 years' experience in the job search sector. Find out more by connecting with her on LinkedIn or visiting her website.