How to Write a Layoff Letter Due to Lack of Work
When a company faces a shortage of work for any number of reasons, it may need to take a more drastic approach and lay off employees. And regardless of the reasoning behind the layoffs, they tend to be difficult for both the company and the affected employees.
In these situation, a well-written letter accompanied by an in-person conversation will help make sure the impacted employees understand the problem and help them feel respected throughout the process.
In this short article, I will explain how to correctly put together a layoff letter due to lack of work - using the same process we have implemented in the past.
Key Takeaways
A layoff letter due to lack of work is a formal message (email or letter) that tells an employee their role is ending because the company cannot provide enough work. A clear, professional letter paired with an in-person or video conversation helps employees understand the reason and feel respected. The letter should explain the layoff, the effective date, and the key details the employee needs for next steps.
State the reason clearly: the layoff is due to a lack of available work.
Include the effective date or last day of employment.
Keep the wording simple and avoid confusing or unnecessary language.
Use an empathetic, respectful tone since layoffs can have a major impact.
Provide the practical details: severance pay (if applicable), benefits, and any other relevant entitlements.
Add a point of contact (name and contact information) for follow-up questions and support.
When possible, have an in-person or video conversation before sending the letter so it is not delivered without context.
If relevant, clarify that the decision is based on business circumstances and not the employees performance or contributions.
Benefits continuation depends on employer policy and applicable laws; some employees may be able to continue coverage for a period, or use options such as COBRA.
Rehire may be possible if work returns, but there is no guarantee.
What is a layoff letter due to lack of work?
A layoff letter due to lack of work is a written document (email or physical letter) that informs an employee that they will be losing their job due to the company's inability to provide sufficient work.
It’s a formal document that should be drafted professionally, outlining the reasons for the termination and the specific details of the termination. The letter should also provide information on severance pay, benefits, and other pertinent details.
To put it simply, A layoff letter due to lack of work is a message that tells someone they’re losing their job because there isn’t enough work for them to do. It explains why this is happening and gives details about things like any extra pay or benefits they might get when they leave.
What are the key elements of a layoff letter?
This letter should include several key elements, but the primary parts are; a clear and concise explanation of why the layoff is necessary, the effective date of the release, information on severance pay, benefits, and any other relevant details, and contact information for the employee to ask any follow-up questions or seek support.
How to Write a Layoff Letter Due to Lack of Work
Writing a layoff letter due to lack of work is definitely a challenging and sensitive task but still a necessary part of any transition. Here are some tips to consider when drafting the letter:
Prepare in Advance
Plan and prepare the letter to ensure it is professional and respectful. This isn’t just another introductory letter or email you are writing for work.
Keep it Simple
Be clear and concise in your writing, and avoid any unnecessary or confusing language.
Be Kind
Be empathetic in your tone and approach since it is a sensitive matter. The layoff may have an extreme impact on the employee.
Provide Details
Provide relevant information, such as the reason for the termination, the effective date, and the employee's entitlements.
Support When You Can
Be available to answer any follow-up questions or point them in the right direction for help (such as your HR team or their manager).
Note: It’s best to have an in-person (or video chat) conversation with the employee before sending them the layoff letter. It can often be rude to send a letter out of the blue without any context or person-to-person discussion.
Sample Layoff Letter Due to Lack of Work
Sample #1
Dear [Employee Name],
I am writing to inform you that your position at [Company Name] is being terminated due to a lack of available work. Unfortunately, the company is facing a significant demand reduction, which has resulted in a reduced need for staff. As a result, we cannot continue your employment beyond [effective date of termination].
Please be assured that this decision was not made lightly, and we recognize the significant impact this will have on you. As part of your entitlements, you will receive severance pay, which will be paid under company policy. You will also be entitled to any accrued vacation pay and other benefits.
We understand that this news may be difficult to hear, and we encourage you to reach out to us with any questions or concerns. Please do not hesitate to contact [insert name and contact information] for support during this time.
Thank you for your contributions to [Company Name], and we wish you all the best in your future endeavors.
Sincerely,
[Your Name]
[Company Name]
Sample #2 (After having an in-person discussion with the employee)
Dear [Employee Name],
As we discussed earlier today, it is with great regret that we must terminate your position as [Employee's Position] with [Company Name], effective [Last Day of Employment], due to a significant decrease in workload. This decision does not reflect your performance or contributions but is a direct result of the current business circumstances.
Given the lack of work, we cannot continue employing you in your current role. However, we sincerely value your dedication and commitment during your time with the company.
You will receive [Severance Package Details], including [Severance Pay, Insurance Continuation, etc.]. Furthermore, we are committed to supporting you during this transition and will provide [Outplacement Services, Job Search Assistance, etc.] to help you secure new employment opportunities.
Please schedule a meeting with the Human Resources department at your earliest convenience to discuss further details and address any questions or concerns you may have.
We appreciate your understanding and wish you the best in your future endeavors.
Sincerely,
[Your Name]
[Your Title]
Sample #3
Dear [Employee Name],
It is with a heavy heart that I write to inform you that due to a substantial decrease in workload, your position as [Employee's Position] at [Company Name] will be terminated, effective [Last Day of Employment]. I want to emphasize that this decision is in no way related to your performance or dedication to the company. Instead, it is a result of the current business climate and reduced demand for our services.
In appreciation of your service to the company, we will provide you with a severance package, which includes [Severance Package Details such as Severance Pay, Insurance Continuation, etc.]. Our Human Resources department will contact you shortly to discuss these details and address any questions you may have.
We will also offer [Outplacement Services, Job Search Assistance, etc.] to help you transition to new employment opportunities.
Thank you for your hard work and commitment during your time with [Company Name]. We wish you success in your future career endeavors.
Sincerely,
[Your Name]
[Your Title]
Frequently Asked Questions (FAQ)
Can employees be laid off due to lack of work?
Yes, employees can be laid off due to a lack of work if the company cannot provide sufficient opportunities. In such cases, an in-person discussion and layoff letter should be given to the impacted employees, outlining the reasons for the termination and any relevant details.
What happens to benefits during a layoff?
The continuation of benefits during a layoff like this will depend on the employer's policies and the applicable laws. In some cases, employees may be able to continue their benefits for a while after the layoff. In contrast, in other cases, they may need to seek alternative options for healthcare coverage (such as COBRA).
Can employees be rehired after a layoff?
Employees can be rehired after a layoff if the company can provide sufficient work in the future. However, there is no guarantee of rehire, and it will depend on the employer's needs and the individual employee's qualifications/availability.
What does laid off due to lack of work mean?
“Laid off due to lack of work” means the employee is being separated because the employer does not have enough work available. It is not based on performance or misconduct. The role may be reduced, paused, or eliminated because of business needs. The separation notice and layoff letter should use clear, consistent language.
What is the difference between layoff and termination?
A layoff is a job separation driven by business conditions, such as reduced workload or restructuring. Termination is a broader term that can include many reasons for ending employment. In practice, “termination” can refer to both layoffs and for-cause separations, depending on how an employer uses the word. Your documents should state the reason plainly to avoid confusion.
Is a layoff a termination?
A layoff is a type of termination in the sense that employment is ending. The key difference is the reason: layoffs are tied to business needs, not an employee’s conduct or performance. Use “layoff” when that distinction matters for clarity. Keep your messaging consistent across letters and internal records.
What does laid off mean vs fired?
“Laid off” usually means the job ended because the company did not have enough work or is making a business change. “Fired” usually means the job ended because of an employee-related issue, such as performance or policy violations. These terms can carry different expectations and emotions. Choose the term that matches the situation and supports clear documentation.
Can an employer layoff without notice?
Sometimes layoffs happen with little or no lead time, especially when business conditions change quickly. If you are planning a layoff without notice, keep the communication direct and respectful. Provide an in-person conversation when possible and follow it with a written layoff notice. Make sure your approach aligns with your company’s policies and legal guidance.
What does lack of work mean on separation notice?
On a separation notice, “lack of work” indicates the employee is leaving because there is not enough work available from the employer. It signals the separation is business-driven rather than employee-driven. The phrase should match the reason stated in the layoff letter. Keep the wording simple and consistent across all documents.
“Change is not a threat, it’s an opportunity. Survival is not the goal, transformative success is.”
Wrapping Up | Layoff Letter
Even though it’s a small part of the overall termination process, writing a layoff letter due to lack of work is a sensitive and challenging task that requires careful consideration and planning.
Hopefully, these steps can help you draft a unique, professional, and empathetic letter of your own that respects the dignity of your employees and helps ease the transition process.
Best of luck with your business!
Final Note: If you need assistance transitioning an employee (or employees) into a new career, our outplacement services might be the right fit. Contact us here with any questions and we will let you know if we would be the right fit.
Voluntary vs Involuntary Termination
Tags: Layoff due to lack of work, Layoff letter due to lack of work, sample layoff letter due to lack of work
Author: Reid Alexander
Disclaimer: This content is for informational purposes only & not intended as professional legal or HR advice. Consult with qualified professionals for advice tailored to your specific situation. The author & publisher disclaim any liability for errors, omissions, or actions taken based on this content.