Reduction in force (RIF): what it means and what to do next

What a RIF is, and how it differs from a layoff

In ordinary use, RIF and layoff mean the same thing: the job is cut for business reasons. Employers and the federal government use “RIF” for a permanent elimination of positions, and use “furlough” or “temporary layoff” when the job is expected to return.

A RIF is not a firing. The reason is the role or the headcount, not conduct or performance. That matters for unemployment, for severance and for how you explain it to the next employer.

What a RIF letter should tell you

• Your last day, and whether you work through it or are paid to stay home.
• The date your pay and your health coverage end. These are often different dates.
• Whether a severance offer comes with it, and what you must sign to get it.
• What happens to unused vacation, bonuses, equity and your 401(k) match.
• Who to call with questions, and any outplacement or job search help the employer provides.

The first week

• Do not sign the release the day you get it. Ask for the full agreement and the deadline in writing.
• File for unemployment the week you are separated. Severance may delay or reduce benefits in some states, but filing starts the clock. Our state pages show the rule for each state.
• Mark your health coverage dates. You have 60 days to elect COBRA, and coverage is retroactive once you elect it, so compare it with a marketplace plan before you pay.
• Ask in writing for the reason for separation, your final pay date and your unused-vacation payout. State law sets the final pay deadline.
• Save what you are allowed to keep: your performance reviews, your list of accomplishments and the names of people who will vouch for you. Do not take confidential files.

How employers choose who goes

There is no single formula. Employers usually decide which roles or teams are cut first, then choose within them using documented criteria such as skills the business still needs, performance record, seniority and location. Many employers write the criteria down because a written reason is easier to defend.

The choice cannot be based on a protected trait such as race, sex, age (40 and over), disability or religion, or be a reprisal for a complaint or a leave. If the people selected skew older or fit a pattern, that can be evidence of discrimination even when no one meant it. If you suspect this, talk to an employment lawyer quickly: the time limit to file a charge with the federal EEOC is 180 days, and 300 in many states.

Notice, severance and your rights

• The federal WARN Act requires 60 days’ notice from employers with 100 or more employees when a closing or a mass layoff reaches enough workers at one site. If the notice was short, the employer may owe up to 60 days of pay and benefits. Some states, including New York, New Jersey and California, have their own notice laws.
• Severance is not required by federal law. It comes from a contract, a policy or a negotiation. In a RIF it is usually offered in exchange for a release of legal claims.
• If you are 40 or older and are asked to sign a release as part of a group layoff, federal law (the Older Workers Benefit Protection Act) gives you 45 days to consider it, 7 days to revoke after signing, and a written list of the job titles and ages of everyone selected and not selected. For a single person the period is 21 days.
• Your final paycheck and any vacation payout follow your state’s law, whatever the letter says.

• WARN Act rights and what to do with a notice
• Severance package: what it is and how to negotiate it
• Federal employee? Read the federal RIF guide

Can I come back, and what do I say next

Ask HR whether you are marked eligible for rehire and get it in writing. Some employers recall people when the work returns, and union contracts often give recall rights in order of seniority.

On your résumé, state it plainly: “Position eliminated in company restructuring.” In an interview, keep it to one sentence about the company and move on to your results. Our guide on explaining a layoff gives the wording.

• How to explain a layoff in an interview

Frequently asked questions

Free tools for this

• Layoff deadlines: what to do and by when
• Severance calculator
• Unemployment benefit estimator: about how much you could get