Preparing for and Implementing Staff Layoffs

Human Resources Tip Sheet

Thinking about, let alone planning and implementing, staff layoffs is never an easy task. When layoffs are necessary though, there are a number of operational and administrative considerations, and pieces to put in place.

The check list below is not a comprehensive tool but can be used to facilitate planning.

Before Layoffs Are Imminent

Make sure that all job descriptions are current.
Complete outstanding performance reviews and ensure all employees have annual goals.
Identify any policies or previous ways of determining which positions are eliminated or which employees are laid off.
Review your severance policy* or past practices.
Clarify and communicate how decisions are made generally and in relation to layoffs.
Determine what information can be shared with staff and identify the appropriate venues for sharing (i.e., staff meetings, emails, individual conversations).

Implementing Layoffs

Create a plan and time line:
- Determine which positions will be eliminated and which employees will be laid off.
- Determine timing and any benefits or compensation to be made available to departing employees.
- Get legal advice as needed.
- Secure necessary board or other approval.
- Identify any tasks or projects that need to be completed before employees leave, and create related plans.
- Prepare necessary documentation and paperwork.
- Communicate with individual affected employees.
- Communicate with the full staff.
- Communicate with constituents, the individuals or community you serve.
Take care of the following administrative issues:
- Draft a letter of termination, which
  - tells each affected employee that his/her position is being cut
  - and explains the various details.
- Prepare severance agreements as appropriate.
- Determine health insurance policies. Are employees are covered through the last day of employment or the last day of the month?
- Prepare COBRA documentation which explains that employees have the right to remain on an organization’s group health insurance plan, and information about other benefits like flexible spending plans and life insurance policies.
- Make sure that employees receive their last pay check, including any unused, earned vacation time on their last day of employment.
- Provide information about unemployment benefits.
Secure resources for departing employees like references and access to job search support organizations.
Secure resources for remaining staff like an employee assistance program.
Provide opportunities for remaining staff to talk about their feelings and concerns – through group and/or one-on-one conversations.
Communicate a plan or process for determining how to meet ongoing organizational goals and needs, and for determining what work will no longer be performed given fewer resources.

* Some nonprofits may be able to pay staff salaries for a few weeks after their employment has ended.

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