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Employee Termination Vs. Layoff

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Termination and layoff often are used interchangeably, but "termination" is actually a broader term, referring to any situation in which a worker leaves a job. Being laid off means a termination was involuntary but without cause.

Termination Basics

Quitting, resigning, being fired and being laid off are common forms of termination. Quitting or resigning are voluntary acts by an employee who's leaving a job of his own volition. Getting fired or laid off is an involuntary termination, meaning the company is letting the employee go against his will. A person is fired for poor performance, violation of company policies or egregious acts, such as theft or assault. A layoff is normally based on an organized workforce reduction or elimination of a department or position. Some federal and state laws protect employees from involuntary termination based on discrimination or retaliation.

Being Laid Off

Companies sometimes turn to employee layoffs when revenue slows or profit falls. Labor is a significant expense, and cutting a portion of workers quickly reduces the payroll. Organizations often provide severance packages to laid-off workers as a measure of good faith or in line with contracts or policies. In interviewing for another job, it is more favorable to say you were laid off than fired, because it creates the perception that your performance had nothing to do with the termination.

About the Author

Neil Kokemuller has been an active business, finance and education writer and content media website developer since 2007. He has been a college marketing professor since 2004. Kokemuller has additional professional experience in marketing, retail and small business. He holds a Master of Business Administration from Iowa State University.

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