Economic headwinds: Navigating layoffs with care and compliance

When budgets tighten—whether because of a federal government shutdown, grant cuts, manufacturing slowdowns, or a dip in tourism—some employers face the difficult decision to reduce staff. If layoffs are on the table, approach them with empathy, clarity, and legal diligence.

Key considerations

Consider these factors in connection with potential layoffs:

Confirm layoffs are a last resort. First, explore furloughs, reduced hours, job sharing, and nonessential cuts. Move to layoffs only when necessary for long-term stability.

Assess WARN obligations. The federal Worker Adjustment and Retraining Notification Act (WARN) generally requires 60-days’ notice for certain mass layoffs or plant closings at employers with 100+ full-time employees. Check state laws where your employees work. Some states—including Maryland, Virginia, and New York—may trigger notice at lower thresholds under specific conditions.

Communicate with compassion and clarity. Both departing and remaining employees need information. For departing employees, deliver the news privately (in person or via video), be direct and respectful, and thank them for their contributions. For employees who are staying on, hold a candid meeting about what is changing, why, and how workloads and priorities will be managed to help stabilize morale.