what is a layoff

A layoff is the temporary suspension or permanent termination of employment of an employee or a group of employees for business reasons, such as personnel management or downsizing an organization. It is an involuntary separation from work initiated by the employer for economic reasons to cut costs, and it is unrelated to the employees performance. Layoffs typically affect groups of workers and may be prompted by an economic downturn, corporate restructurings, or other business-related factors. Employers may offer severance agreements to laid-off workers, and employees may be eligible for unemployment insurance. Layoffs are distinct from firings for cause, such as unacceptable workplace behavior, and from furloughs, which are temporary, mandatory reductions in hours worked enacted by an employer to save on payroll costs while avoiding layoffs.