What is the best way to let employees know a layoff is coming? For most organizations of size, a layoff memo—also known as a layoff notice—is an important part of the communication. A memo can inform all members of the organization of the news at the same time, answering key questions and keeping rumors at bay. In addition, a memo provides the opportunity to thank exiting employees for their service and motivate retained workers toward new company goals.
A layoff memo is generally addressed to the entire company. This makes the memo a very different form of communique from the employee termination letter—sometimes called a layoff letter—which is addressed to an individual employee who is being laid off and usually given during a layoff meeting.
If your company is small, or only a few people are affected by a layoff, you may not need to write a layoff memo because you can speak with each affected person individually and convey the news to retained employee in small meetings. In other cases, however, a layoff memo can be more efficacious—and in some situations, mandatory. The Worker Adjustment and Retraining Notification (WARN) Act requires employers of 100 or more full-time employees to provide written notice 60 days in advance of layoffs that affect more than 50 employees. Some state-level WARN laws cover smaller employers or require more advance notice. Even if your particular layoff doesn’t require a WARN notice, you may still want to have a layoff memo to keep everyone informed. For example, Viacom sent a layoff memo even when it laid off fewer than 100 employees—or less than one percent of the company.
Aside from making sure to follow WARN Act requirements, there are no hard and fast rules to writing a layoff memo. But to follow best practices, consider including the following elements.
7 elements of a layoff memo
1. Begin the memo with the layoff details
You may be tempted to start your layoff memo by talking about positive or lighthearted company news. However, efforts to sugarcoat bad news will not work in the case of a layoff. In fact, such attempts at cheeriness can make a difficult situation worse.
Take, for example, the layoff memo from an executive vice president that took 11 paragraphs to get to the news that 12,500 employees were about to be laid off. The Intelligencer ridiculed the missive as a “hilariously bad memo,” and CNBC used it as an example of a “crappy, insensitive announcement.”
Since the purpose of the memo is to let your employees know layoffs are coming, state right at the get-go that, well, layoffs are coming. That’s exactly what Buzzfeed CEO Jonah Peretti did in his layoff memo earlier this year, beginning the note with this sentence: “I’m writing with sad news: we are doing layoffs at BuzzFeed next week. We will be making a 15% overall reduction in headcount across the company.”
Tesla CEO Elon Musk took a similar tact with his layoff memo last year, getting to the news of the layoff at the start of the second paragraph: “we have made the difficult decision to let go of approximately 9% of our colleagues across the company.”
2. Include language required by the WARN Act, if applicable
If the WARN Act applies to the layoff your organization is conducting, make sure to follow both federal and state laws by including all required information in your layoff memo. According to the U.S. Department of Labor, the WARN notice must clearly state:
- whether the layoff is expected to be permanent or temporary, or if an entire plant is to be closed
- the expected date layoffs will begin
- the expected date employees will be laid off
- whether or not bumping rights (the right of a more senior employee to replace a less senior employee in the case of a layoff) exist
- the name and telephone number of a company contact
Because some of the information required by the WARN Act may differ by employee (for example, some employees may be laid off earlier than other employees), your company might choose to send a WARN notice separate from the layoff memo that goes out to all employees.
3. Explain the reason for the layoff
At a critical time such as a layoff, open communication becomes especially important. Let employees know why the layoff is occurring so they can understand the decision was not an arbitrary choice but a necessary and strategic determination.
Is your organization overstaffed? Has your business suffered setbacks due to increased competition or a shrinking customer base? Did a merger create redundancies? Spell out the specific reason for the layoff to respond to employee questions before they’re asked. The explanation doesn’t need to be long and detailed, but it does need to be clear and easy to comprehend.
Musk, for example, summed up the main reason for layoffs at Tesla in one sentence: “Tesla has grown and evolved rapidly over the past several years, which has resulted in some duplication of roles and some job functions that, while they made sense in the past, are difficult to justify today.” Peretti too was able to summarize the concern quickly: “The restructuring we are undertaking will reduce our costs and improve our operating model so we can thrive and control our own destiny, without ever needing to raise funding again.” Taking the time to clarify the reason for the layoff will give employees much-needed information and forestall unnecessary rumors.
4. Give details of the layoff process
Once you’ve given the reason for the layoff, let employees know more about the facts of the layoff process. If possible, let workers know how the layoff selections were made. At Tesla, Musk revealed the decision-making process: “We made these decisions by evaluating the criticality of each position, whether certain jobs could be done more efficiently and productively, and by assessing the specific skills and abilities of each individual in the company.” He then went on to reassure the organization that no further layoffs were expected: “I also want to emphasize that we are making this hard decision now so that we never have to do this again.”
5. Highlight severance benefits and outplacement services
Layoffs often have a negative effect on company culture, because the employer-employee trust is weakened when workers are made to leave the company involuntarily. You can help mend this breach in trust by giving affected employees support on their way out—and informing retained employees of the support provided. This is why the Society for Human Resource Management (SHRM) recommends you “inform employees about available benefits (e.g., COBRA and unemployment benefits), severance pay—if there is any—and job-transition assistance” in the layoff memo.
By letting all members of your organization know laid-off employees will be supported with severance packages and outplacement services for job-transition assistance, you will send the message that the company cares about its employees and does its best to help them, even in the case of a layoff.
6. Promote future goals
Since layoffs are conducted to ensure the future health of an organization, clarify in the layoff memo the benefits the reduction in force is expected to achieve. This will help motivate employees after layoffs. Viacom CEO Bob Bakish, for example, reflected on the future of the company in his layoff memo: “I’m so proud of all we’ve accomplished over the past year, and couldn’t be more excited about the opportunity the change in our industry creates. I want us to be an organization that is energized by reinventing this business, and has the capability and capacity to constantly transform. Let’s continually push ourselves to discover what’s new, and what’s next. Let’s get out of our silos and learn from each other, and create the new faster. Let’s embrace change and possibility.”
7. Thank and show empathy for affected employees
In addition to providing tangible benefits to support affected employees, it is crucial to state in the layoff memo that the organization values the exiting workers and the contributions they made to the company. Buzzfeed’s Peretti took several paragraphs in his layoff memo to compliment, honor, and thank his outgoing employees:
“I want to focus on what will be a difficult week, especially for the people who are leaving the company. These are talented people, friends, and valued colleagues, who’ve made huge contributions to our success, and who’ve done nothing wrong. Even though I’m confident this is the right business decision, it is upsetting and disappointing.
On a personal note, I’ve never thought about my job as “just business.” I care about the people at BuzzFeed more than anything other than my family. This will be a tough week for all of us and I realize it will be much worse for the people losing their jobs. To them, I want to say thank you, I’m sorry our work together is ending this way, and I hope we get to work together again in the future. Our loss will be to the benefit of other organizations where I know you will go on to make formidable contributions.”
Most of all, make sure the layoff memo is specifically written for the members of your company. There is no template for a good layoff memo, because the best layoff memos are crafted by unique leaders for unique individuals at a unique organization. While clearly conveying necessary information, you can still allow the personality of the leadership and the culture of the organization shine through.
Intoo’s outplacement solution program helps employees transition to new jobs through one-on-one, on-demand coaching from premier career counselors, resume reviews, and other career services. Learn more about how our outplacement program can benefit your company during a layoff.