Comparing Layoffs, Furloughs and Reductions in Force

One unfortunate reality of the COVID-19 outbreak around the country and the world, among many, is the loss of or change in employment for millions. Due to stay-at-home orders that have impacted numerous businesses, many in payroll services and other related areas have had to make difficult choices regarding employee layoffs or other measures.

At WTA, Inc., we’re here to help with numerous HR services during this difficult time, including payroll services and all related areas. You may have heard about a few different types of employment changes or termination formats during this crisis – today’s blog will give a quick primer on what each of these refers to and which you might consider for your business if the situation dictates some belt-tightening.

layoffs furloughs reductions force


The most direct of the formats we’ll be discussing here is the layoff, which can either be temporary or permanent – most layoffs during this crisis are being labeled temporary, at least for now. Layoffs take place when there is not enough work for a given employee to perform and the company needs to direct those funds elsewhere.

As you can see, this means that in situations where conditions improve, many laid off employees will be rehired. Layoffs are not typically performed due to issues with individual employee performance, for instance. For those who have been laid off due to outbreak-related circumstances, the hope is that when society can safely resume normal activities, most or all of these jobs will rehire them.


A furlough, on the other hand, refers to a forced unpaid leave of absence from a company. Practically, it’s very similar to a layoff – there is not enough work and the employee will not be paid during this period. However, there are differences from an official standpoint: Workers are still an employee of the company, and in many cases will retain benefits. Once things return to normal, salary will also resume.

Reduction in Force (RIF)

The most severe of these measures is the reduction in force, or RIF. This is also similar to a layoff, except that in RIF cases, the business removes an entire position or class of positions completely and permanently. There is no intention of ever rehiring anyone for that position in the future, even if economic or other conditions change or return to normal.

Some companies consider voluntary RIF formats, often as early retirement incentives that benefit both parties. This can be helpful for company cost savings, but also benefits the older employee who is nearing retirement age and looking for security. For more on the various employment change formats you might be seeing, or to learn about any of our human resource services, speak to the staff at WTA, Inc. today.