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Termination Letter Due to Lack of Work

During an economic slowdown or a decline in business, a company may have no other choice than to layoff members of its workforce. When this happens, a letter that explains the situation can help take some of the sting out of the termination.

Content and Format

The purpose of the letter is to notify an employee he or she will be losing a job due to economic conditions. The letter should inform the employee of the specifics of the decision, especially if only part of the work force is terminated. Use the letter to convey your appreciation for an employee’s hard work, years of service, or any other positive information that will help protect the employee’s self-esteem. The letter should be focused and concise and contain information related to the date of the termination and details regarding pay and benefits.


In this sample termination letter, the owner of the company expresses regret at having to let the employee go. This type of sentiment is acceptable when an employee if fired through no fault of his or her own. The owner explains why this particular employee was selected to ward off a potential lawsuit based on discrimination.


236 Austin Avenue

Dallas, Texas 75965

Dear JoAnn,

It is with deep regret that I must inform you that effective June 1, 2013, your position with Premier Alteration Services will be terminated. I know you are aware that we have experienced a significant customer downturn over the last 6 months. While we have cut costs in other areas, the savings is not enough to sustain the business. As a result, we are forced to reduce our workforce.

Over the next 2 months, we will reduce our workforce from 48 employees to 30 employees. We believe that loyalty is a two-way street. We deeply appreciate the loyalty of our employees and therefore, have decided to retain the employees with the greatest amount of seniority. You are a very talented seamstress and I feel confident that you will find another position in the near feature.

To help you through this transition stage, you will receive 2 weeks of severance pay for every year of service to the company. You will receive this pay on the last day of your employment provided we receive the signed release waiver in your severance package. As of today, you have 14 accrued and unused PTO days. You will be paid for these days on your final paycheck or you may elect to take the paid time off to look for another position. You will receive information on your COBRA eligibility by mail within the next 2 weeks.

Enclosed, you will find a letter of recommendation. I encourage you to send this letter along with your resume to prospective employers. You may also give it to employers during an interview. JoAnn, I have thoroughly enjoyed working with you. I hope you will keep in touch in the future. Please call me if you have any questions.


Beverly Jones

Mrs. Beverly Jones, Owner

Premier Alteration Services