A Guide to Laying off Employees

No employer wants to have to make redundancies. Unfortunately, there are times when it’s a necessity in order to keep your business afloat. This guide offers a few tips on how to dismiss staff.

Is a Lay off the Best Solution?

If your business is financially struggling and you need to make big cutbacks, laying off staff is likely to be the most effective way to do this. However, there are other options that may allow you to keep your staff employed. You may be able to cut back on marketing or move to cheaper premises. You could also consider reducing employee hours or furloughing staff until you can financially recover.

There may also be extra ways of earning money instead of relying on cutbacks. This could include subletting unused office space, renting out equipment or calling in debts owed by clients.

It’s best to talk to a financial advisor and get their opinion of what is the best solution. You may find that dismissing staff is your only option.

Choosing Which Employees to Lay Off

When choosing which positions to make redundant, you should consider which roles can be eliminated while causing the least amount of damage to your company.

It’s common for employers to lay off their newest recruits and keep their most loyal employees. You should also consider laying off employees that may be performing poorly. You should be wary of piling too much responsibility on remaining employees – for this reason, you should be careful of dismissing employees that already juggle lots of duties, unless you are able to outsource these duties or do them yourself.

Is Redundancy Pay Necessary?

Redundancy pay could be mandatory in some cases. In other cases, it could be optional as to whether you should pay your employees.

If an employee is still within their probation period or is due to retire, you won’t be expected to pay anything. Employees who have been at your company for over two years will need to be given redundancy pay.

You can find out more about redundancy pay here at https://www.dol.gov/general/topic/wages/severancepay. If you cannot afford to pay redundancy but are legally obliged to, there are specialist services out there that can lend you the money required.

What Legal Documentation Is Necessary?

When making someone redundant, it is necessary that you provide a written redundancy letter. This should clearly state details required by law – it is worth hiring an HR advisor to help you write this letter.

Several weeks before making staff redundant, you should also send out a ‘at risk of redundancy letter’ to staff. You can find advice on how to write this letter online.

How to Break the News

Breaking the news to an employee that you will be making them redundant can be very difficult. It’s best to invite them into your office and get straight to the point. Deliver the news slowly and in a formal tone and explain your reasoning afterwards. You should then give them the letter of redundancy and allow them to ask any questions.

Reactions are likely to vary from employee to employee. The best you can do is be sincere and apologetic, as well as showing them that you will support them in making a transition to whatever their next role may be. It could be worth giving employees the option to take the rest of the day off.

Helping Your Employees to Move On

Supporting your employees in moving on can help to reduce any feelings of animosity. You could assist them with their job search and write a reference letter. You can also use sites like Unemploymenttracker.com to help with unemployment insurance claims to ensure that employees are financially provided for.


If you decide laying off employees is the best decision, you should make sure that employees are given the right legal documentation and the right amount of redundancy pay. Be professional and sensitive when breaking the news and try to help your employees to move on in whatever way you can.

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