Layoff Process Checklist

Document the specific business conditions necessitating the layoff, such as revenue decline, restructuring, or market changes. Clearly define which roles, departments, and locations are affected.

Develop clear, non-discriminatory criteria for selecting positions to be eliminated, such as business need, skill requirements, performance history, and seniority. Document the methodology thoroughly.

Perform a statistical analysis of the proposed layoff list to identify any disparate impact on protected groups based on age, gender, race, or other protected characteristics. Adjust selections if adverse impact is found.

Present the layoff proposal including financial impact, affected headcount, timeline, severance costs, and risk assessment to senior leadership and the board of directors for formal approval.

Retain an employment attorney to review the entire layoff plan, selection criteria, severance agreements, and communications for compliance with federal, state, and local employment laws.

Assess whether the layoff triggers WARN Act obligations by evaluating the number of affected employees and the timeframe. If applicable, prepare and distribute 60-day advance written notices to employees, unions, and government agencies.

If any affected employees are covered by a collective bargaining agreement, review the CBA for layoff procedures, bumping rights, recall rights, and mandatory bargaining obligations before proceeding.

Draft separation agreements that include severance terms, a general release of claims, consideration period, and revocation period as required by the Older Workers Benefit Protection Act and state laws.

Submit all required notifications to the state dislocated worker unit, local workforce development board, and any other government agencies as mandated by federal and state WARN laws or similar statutes.

Maintain comprehensive written records of every step in the layoff decision process, including meeting minutes, selection criteria analysis, legal reviews, and approval documents for potential litigation defense.

Compute the full financial cost of the layoff including severance payments, benefits continuation, outplacement services, accrued PTO payouts, and any other contractual obligations for each affected employee.

Establish a severance formula that considers tenure, role level, and local market standards. Ensure the package is equitable across all affected employees and includes clear terms for payment timing and conditions.

Work with the CFO and finance team to secure budget approval for all layoff-related costs, determine the accounting treatment, and plan the cash flow impact of severance disbursements.

Contract with a reputable outplacement firm to provide career counseling, resume writing, job search support, and interview coaching for laid-off employees as part of the separation package.

Coordinate with benefits administrators to prepare COBRA notifications, determine any employer-subsidized continuation periods, and ensure smooth transition of health, dental, and vision coverage for affected employees.

Create a comprehensive communication strategy with specific scripts for managers delivering layoff notifications, FAQ documents for remaining employees, and external messaging for clients and media if needed.

Provide managers with training on how to deliver the layoff message compassionately, handle emotional reactions, answer common questions, and direct employees to available resources and support services.

Hold private, in-person meetings with each affected employee, with a manager and HR representative present. Deliver the message directly, provide the severance package details, and offer immediate support resources.

Promptly address the remaining workforce with honest, transparent communication about the layoff, the reasons behind it, the path forward, and any changes to team structure or responsibilities.

Draft professional communications for key clients, partners, vendors, and stakeholders who may be affected by the organizational changes, reassuring them of continued service and introducing new points of contact.

Execute the system terminations for all affected employees on the effective date, ensuring final paychecks, severance payments, and benefits terminations are processed accurately and on schedule.

Coordinate the return of laptops, phones, badges, keys, and all company property from each affected employee. Simultaneously disable their network access, email, and building entry permissions.

Work with department managers to assess the remaining workload, prioritize essential functions, and distribute responsibilities fairly among the remaining staff, identifying any skill gaps that need immediate attention.

Increase check-ins with remaining employees, make EAP services visible and accessible, watch for signs of survivor guilt or burnout, and provide forums for employees to ask questions and express concerns.

After 30-60 days, convene the layoff planning team to evaluate the process, identify what went well and what could be improved, and document lessons learned for potential future workforce reduction events.

Maintain a tracking system to monitor the receipt of signed separation agreements, process severance payments according to the agreed schedule, and follow up on any outstanding items.