{"id":126,"date":"2025-09-03T09:37:54","date_gmt":"2025-09-03T09:37:54","guid":{"rendered":"https:\/\/www.digisme.in\/glossary\/"},"modified":"2025-11-07T10:37:34","modified_gmt":"2025-11-07T10:37:34","slug":"layoff","status":"publish","type":"glossary","link":"https:\/\/www.digisme.in\/glossary\/layoff","title":{"rendered":"Layoff"},"content":{"rendered":"\n

A layoff is a suspension or permanent termination of staff or a team by the organization. It is not just only about the employee\u2019s fault but there are several reasons resulting in elimination of employees from the business enterprises.<\/p>\n\n\n\n

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What are the Reasons for Layoffs?<\/strong><\/h3>\n\n\n\n

Layoffs are happening for different reasons and it changes from one company to another. The most common causes of layoffs are highlighted below.<\/p>\n\n\n\n

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  1. Outsourcing<\/strong> \u2013 Company starts assigning works to 3rd<\/sup> party vendors or oversees units.<\/li>\n\n\n\n
  2. Performance Issues<\/strong> \u2013 Staffs who don\u2019t perform as per the company\u2019s requirements might be laid off occasionally.<\/li>\n\n\n\n
  3. Technological Advancements<\/strong> \u2013 Automation or AI tools replace human job only if it\u2019s repetitive or data-driven roles.<\/li>\n\n\n\n
  4. Cost-cutting<\/strong> \u2013 Companies start reduction of headcount to save operating costs when there is a budget cut.<\/li>\n\n\n\n
  5. Mergers and Acquisitions <\/strong>\u2013 Workforce reduction becomes essential after mergers due to role duplications.<\/li>\n\n\n\n
  6. Loss of Funding<\/strong> \u2013 SMEs remove part of workforce if they lose investor support or key revenue sources.  <\/li>\n\n\n\n
  7. Business Relocation<\/strong> \u2013 A company moving to different region or country can layoff employee to commence new business operation with native people from their location.<\/li>\n\n\n\n
  8. Organizational Restructuring<\/strong> \u2013 Revamping departments or processes can lead to role eliminations.<\/li>\n\n\n\n
  9. Economic Recession or Crisis<\/strong> \u2013 Global or local economic downturns may force companies to scale back their workforce.<\/li>\n<\/ol>\n\n\n\n

    Layoff vs Firing vs Furlough<\/strong><\/h3>\n\n\n\n
    Category<\/strong><\/td>Layoff<\/strong><\/td>Firing<\/strong><\/td>Furlough<\/strong><\/td><\/tr><\/thead>
    Reason<\/td>Business-related<\/td>Performance or misconduct<\/td>Temporary unpaid leave<\/td><\/tr>
    Fault<\/td>No fault of employee<\/td>Employee is at fault<\/td>No fault of employee<\/td><\/tr>
    Rehire possibility<\/td>Yes<\/td>No<\/td>Yes<\/td><\/tr>
    Benefits<\/td>Severance may apply<\/td>Not offered<\/td>Benefits may continue<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

    Layoff Alternatives<\/strong><\/h3>\n\n\n\n

    Employers immediately don\u2019t have to opt for layoffs as they can try below given alternatives.<\/p>\n\n\n\n