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ONEDIGITAL TOOLKIT | REDUCTION IN FORCEReduction In Force GuideDetermining Criteria | Legal Guidance | Resources & Tips

ONEDIGITAL TOOLKIT | REDUCTION IN FORCEUsing This GuideA Reduction in Force (RIF) is one of the most difficult decisions an employer may face. While challenging and deeply personal, a RIF is sometimes necessary to protect the long-term health and stability of a business. Though a RIF is typically a strategic, permanent decision, some companies may use the term interchangeably with "layoff.“As economic pressures mount, many organizations are weighing the need to reduce costs and streamline operations, making a RIF a potential consideration. While a well-executed RIF can help minimize expenses, enhance productivity, and position a company for long-term success, it also carries significant implications for employees and workplace culture. A thoughtful, strategic approach is essential to ensure the process is conducted fairly, legally, and with empathy.The OneDigital Reduction in Force Toolkit is designed to help leadership and managers navigate the RIF process with care and compliance. This guide provides best practices, legal considerations, communication strategies, and support resources to help organizations minimize risk and reduce the impact on employees during this difficult transition.1. Making the Decision2. Planning a RIF3. RIF Preparation4. Day of RIF5. Post RIFCONTENTS:OneDigital’s Federal Funding Impacts: Top Employer Questions AnsweredGet answers to the top questions about workforce reductions, key compliance considerations and alternatives to layoffs.ACCESS HERE →

ONEDIGITAL TOOLKIT | REDUCTION IN FORCEDeciding to Conduct a Reduction In ForceSECTION 1Organizations downsize for various reasons, often as a response to financial pressures, operational shifts, or strategic realignments. A decline in demand for products or services is one of the most common catalysts, leading to reduced revenue and profits. To mitigate costs and stabilize the business, companies may reduce their workforce.Mergers and acquisitions also frequently result in workforce reductions, as redundant roles and departments are consolidated to streamline operations. Additionally, technological advancements and automation can replace certain job functions, reducing the need for manual labor in areas like retail, data entry, and customer service. As industries evolve, businesses must adapt—sometimes through difficult staffing decisions.In some cases, layoffs may occur due to employee performance issues or policy violations. When underperformance or misconduct impacts productivity and workplace culture, companies may choose to terminate employment.Regardless of the reason, reductions in force have significant consequences for both affected employees and those who remain. A strategic, transparent, and compassionate approach helps organizations minimize risk, maintain morale, and navigate the transition with integrity.START WITH A TEAM:There is power in a team of people making tough decisions together. A designated group allows for a more comprehensive and balanced approach to the process. Here are a few reasons why:Shared Accountability & Support:Finally, involving a team in layoff decisions can help ensure everyone shares the responsibility for the outcome. This helps lessen the burden on any one individual and creates a more collaborative and supportive workplace culture overall.Diverse Perspectives:A cross-functional team brings together different viewpoints and expertise, ensuring that all angles are considered, and potential biases are identified and mitigated. This helps create more thoughtful, strategic, and well-rounded decisions.Ensuring Fairness & Compliance: Layoff decisions must be based on objective criteria, not personal relationships or emotions. A team helps standardize the process, reduce risk, and maintain legal and ethical integrity, ensuring compliance with employment laws and internal policies.Business & Employee Impact: Involving leaders from various departments (such as sales, operations, HR, and finance) ensures that workforce reductions are made with both business continuity and employee wellbeing in mind.1

ONEDIGITAL TOOLKIT | REDUCTION IN FORCEThe RIF team should be composed of key leaders who have deep insight into the financial health, operations, and workforce strategy of the organization. While the specific team members may vary, it typically includes the CEO, CFO, Head of People, and department leaders from affected areas. This team is responsible for assessing whether a reduction in force is the right course of action and managing the critical details to ensure a thoughtful, strategic, and compliant process. Questions this group will be responsible for addressing include but are not limited to the following:1. Why is a layoff necessary? What are the underlying business reasons that make this an essential action?2. Who will be affected by the layoff? How many employees will be impacted, and what departments or teams will be involved? 3. What are the legal implications of a layoff? Are there any specific laws or regulations that need to be followed, such as providing notice or severance pay? 4. What are the financial implications of a layoff? How much money will the company save, and what will be the costs associated with the RIF (such as severance pay, unemployment insurance, and legal fees)? 5. What is the communication plan for the layoff? How will affected employees be notified, and what resources will be available to help them during the transition? 6. How will the layoff impact the remaining employees? What steps can be taken to mitigate any adverse effects on morale, productivity, and retention? 7. What alternatives to a layoff have been considered, such as reduced work hours, furloughs, or hiring freezes? 8. How will the layoff impact the company's reputation and relationships with customers, suppliers, and other stakeholders? 9. What is the long-term outlook for the company? Will the layoff help position the company for future success, or will it have a negative impact on the company's growth and prospects? 10. What support can be provided to affected employees, such as job placement assistance, career coaching, or access to training and education programs? 2ASSEMBLING THE TEAM

ONEDIGITAL TOOLKIT | REDUCTION IN FORCEPlanning for a Reduction In ForceSECTION 2DETERMINING THE CRITERIACommon Criteria May Include:Seniority – Employees with longer tenure may be retained due to their experience and investment in the company, while those with shorter tenure may be more vulnerable to layoffs.Skills & Experience – Employees with specialized skills or expertise in key areas may be prioritized for retention, especially if their knowledge is difficult to replace.Role Criticality – Positions deemed essential to organizational success are more likely to be retained, while non-critical roles or those that can be outsourced or automated may be at greater risk.The reasons and criteria for the reduction will likely overlap for a few different reasons. Regardless of the criteria, the employer should carefully think through the decisions to ensure all decisions are made fairly.As the RIF team works through the criteria for who will be laid off, there are several federal laws that should be considered that protect different classes of employees against discrimination:• Title VII of the Civil Rights Act of 1964 - Prohibits discrimination based on race, color, religion, sex, or national origin.• Age Discrimination in Employment Act (ADEA) and Older Workers Benefit Protection Act - Prohibits discrimination against employees 40 years of age and older.• Fair Labor Standards Act (FLSA) – Primary employment provisions are governed by FLSA and should be kept in mind as employers consider layoffs and the pay provisions that go with the terminations.• Uniformed Services Employment and Reemployment Rights Act – Protects military service personnel from employment discrimination based on their service.LEGAL CONSIDERATIONSIn addition to these federal laws, be sure to check state and local laws. For example, many state laws add additional discrimination protections for ancestry, gender identity, disability, pregnancy, mental illness, retaliation, sexual harassment, sexual orientation, active military personnel, and genetics. 3Establishing clear, objective criteria for determining which employees will be impacted by a RIF is critical—not only for executing the reduction fairly and strategically but also for managing the reallocation of tasks and workforce structure afterward.This Justification Template serves as a structured decision-making tool, helping the team assess and document choices transparently, minimize bias, and ensure legal compliance throughout the process.

ONEDIGITAL TOOLKIT | REDUCTION IN FORCEReduction In Force PreparationSECTION 3With so much at stake for both the business and its employees, thorough preparation is essential when implementing a Reduction in Force (RIF). The way a RIF is handled can have a lasting impact on morale, motivation, and workplace culture, often extending far beyond what leaders anticipate. A thoughtful, well-communicated approach helps minimize disruption, maintain trust, and support remaining employees through the transition. Beyond immediate logistics, strategic workforce planning ensures the organization retains the critical knowledge and expertise needed to operate effectively. By proactively identifying key roles and employees, businesses can safeguard essential functions and position themselves for long-term success despite the challenges of a RIF.ADDITIONAL LEGAL CONSIDERATIONS DURING A RIFAs employers prepare to implement a reduction in force, it is important to discuss with legal counsel to ensure all federal and state requirements are appropriately followed to minimize risk. Some laws to be aware of, beyond those reviewed during the criteria section include:Worker Adjustment and Retraining Notification (WARN) ActThe WARN2 Act requires employers with 100 or more full-time employees (excluding those employed for fewer than six months) to provide at least 60 days’ written notice before:• A worksite closure affecting 50 or more employees, or• A mass layoff impacting at least 50 employees and one-third of the workforce, or 500 or more employees at a single location within a 90-day period.Final Pay RequirementsState laws vary on when final wages must be paid in cases of involuntary termination, such as a layoff. While some states follow federal guidelines, others require immediate payment by the end of the employee’s last working day. Employers should review state-specific regulations and ensure compliance.COBRA & Continuation of BenefitsUnder COBRA, group health plans must offer continuation coverage for medical, dental, and vision benefits to employees, spouses, and dependents who would otherwise lose coverage due to termination. Employers not subject to federal COBRA should check for applicable state mini-COBRA laws.Severance Agreements & Legal ProtectionsTerminations may raise concerns about potential discrimination claims related to age, race, sex, national origin, disability, or other protected classes. To minimize the risk of potential litigation, many employers offer severance agreements, providing compensation or benefits in exchange for a waiver of legal claims, including discrimination claims under federal civil rights laws enforced by the Equal Employment Opportunity Commission (EEOC).. For a deeper discussion, read the Severance Agreement Infobrief.4

ONEDIGITAL TOOLKIT | REDUCTION IN FORCEDOCUMENT PREPARATIONPreparing the right documentation is critical to ensuring a fair, transparent, and legally compliant Reduction in Force (RIF) process. A structured, documented approach not only protects the organization but also fosters trust and accountability throughout the transition.MANAGER PREPARATION AND TRAINING1. Guidance on Severance Agreements2. Separation Letters3. ScriptsManagers can play a pivotal role in how employees react to the news of a layoff but are often poorly prepared. It is important for employers not to miss the importance of training managers on how to have the conversation with employees being laid off, but also those that will remain at the organization.Key elements of training include:• How to deliver the message effectively and compliantly; • It’s not enough to give managers a script; role-playing the conversation is an important piece of the training and can significantly affect how laid-off employees react; • Coach managers on some of the frequently asked questions they may receive; and • Training also gives managers a chance to express their concerns, ask questions, and support one another, which helps them adjust and better equips them to provide support for employees. 5DETERMINING THE PROCESS• Who is communicating?• Materials return• 401k• Separation letterEstablishing a clear process for administering and managing documentation ensures that all RIF-related decisions are well-documented, consistent, and legally compliant. A structured approach also helps streamline communication, reduce errors, and provide a clear record of the rationale and actions taken, protecting both the organization and its employees.• Benefits/COBRA• Outplacement• FAQ’s

ONEDIGITAL TOOLKIT | REDUCTION IN FORCEDay of Reduction In ForceSECTION 4Thorough preparation is crucial for those responsible for implementing a Reduction in Force (RIF) to ensure the process is clear, consistent, and compassionate. This includes developing a standardized script so leaders communicate a unified message, preparing all necessary documentation for affected employees, and thoughtfully addressing remaining team members' concerns. Anticipating questions and providing well-prepared, transparent answers helps foster trust and stability during a challenging time. With careful planning, organizations can navigate a RIF with respect, empathy, and professionalism, minimizing disruption and preserving workplace morale.COMMUNICATION WITH AFFECTED EMPLOYEESHaving a termination conversation with employees is never easy, but preparing will alleviate some anxiety and ensure that the right messages are communicated to the right people at the right time. Key objectives for the meeting are:• To communicate the company’s decision; • To provide facts honestly and clearly; • To present the decision as final; and • To offer support and encouragement. This sample script and FAQs will guide employers as they prepare to have conversations with affected employees. The script should address the following:• Reasons for the reduction in force; • FAQs; • Overview of separation benefits, severance (where applicable), and services available; • The expectations for packing up and leaving; and • Future of the organization. Keep in mind that people typically have three questions when notified of being laid off. Be prepared to answer each: What happened?Why me?What’s next?Rehearse the script thoroughly, anticipating employee reactions. For unique concerns, seek guidance beforehand. If possible, role-play with HR; otherwise, practice aloud. Keep meetings to 10–15 minutes to ensure effective communication and avoid counterproductive delays.6

ONEDIGITAL TOOLKIT | REDUCTION IN FORCEPREPARING FOR THE MEETINGFind a private setting with at least two chairs, a desk, or a table, and no windows facing work areas. The room should have a telephone, all necessary materials, tissues, cups, and water. Do not conduct the meeting in the employees’ office. It’s advisable to have two company representatives present for the discussion. Documents to be Distributed:Rehearse the script thoroughly, anticipating employee reactions, and seek guidance for unique concerns. If possible, role-play with HR; otherwise, practice aloud. Keep meetings brief (10–15 minutes) to ensure clear, compassionate communication. Delivering information promptly and with empathy helps employees feel valued, reduces uncertainty, and supports a smoother transition. Separation letter  Severance Agreement  Benefits and COBRA information  401K rollover paperwork  Financial guidance support State unemployment guidance and filing information  Outplacement information (where applicable) SEVERANCE CONSIDERATIONSWhile not required, employers may offer severance to employees to provide additional pay to employees beyond their termination date. In doing so, some considerations beyond the legal requirements should be considered concerning how much severance to offer employees and structuring payments. Below is a discussion of those considerations:1. What has been done in the past? It is critical that severance packages are administered consistently. If severance packages have not been offered in the past, keep in mind that doing so now could be setting a precedent. 2. Are there employees with pre-existing agreements to follow? Examples of such agreements could be a Change of Control agreement for a C-level employee, an employment contract, or some other agreement outlining pay. 3. Beyond pay, are there other pay and benefits that could be offered, such as COBRA? Remember that COBRA may not be an option if the business is closing. 4. Explore including any unpaid discretionary bonuses. 5. What methodology will be used for determining how much to pay? a. Tenure-Based Severance: Employees receive severance based on years of service, with a predetermined maximum. For example, a base of two weeks' pay plus one additional week per year of employment, up to a maximum of 12 weeks. b. Seniority/Level-Based Severance: Severance varies by role, assuming no prior agreements exist. For instance, individual contributors receive two weeks, managers receive four weeks, and executives/VPs receive six weeks.7

ONEDIGITAL TOOLKIT | REDUCTION IN FORCESupport for Managers:Preparation can help managers anticipate and manage their own emotions during this challenging process, enabling them to remain professional and supportive throughout. However, it goes without saying that anyone who is involved in a reduction in force is likely to feel the stress and anxiety of the situation. It’s important to remember this and support all employees and managers through this difficult time for the organization. Support for Employees:Layoffs can be a difficult and stressful experience for both the employees being let go and those who remain in the company. During this time, it's important for employers to prioritize the mental health and wellbeing of all their employees. One way to do this is by offering support resources such as employee assistance programs, counseling services, or access to mental health professionals. Employers can also encourage open communication and provide opportunities for employees to discuss their concerns and feelings. Additionally, providing clear and transparent information about the layoff process can help alleviate anxiety and uncertainty. Employers can also consider offering career transition assistance, such as job search resources or training programs, to help employees who are leaving the company. Supporting employee mental health during layoffs can not only help individuals navigate a challenging time but also foster a culture of trust and respect within the organization. For more information on supporting employees, consult the following OneDigital Resources: The People Manager Toolkit: Mental Health During a RIF and A Leader’s Guide to Mental Health.8

ONEDIGITAL TOOLKIT | REDUCTION IN FORCESupporting Remaining Employees After a RIFSECTION 5A reduction in force (RIF) impacts not only those who are leaving but also the employees who remain. To maintain morale and productivity, companies must have a clear communication plan that offers transparency, support, and reassurance. COMMUNICATING WITH REMAINING EMPLOYEES Effective communication is key to addressing concerns and maintaining a positive work environment. Employees who remain may feel anxious about job security, increased workloads, or the company’s future. Managers should be transparent about the reasons for the layoffs, the company’s direction moving forward, and what is expected of the remaining workforce. Review the Communication Guide for Remaining Employees resource for sample scripts. Key areas to address include: Supporting Remaining Employees:• Mental Health & Wellbeing support• Focus on retention: • Total Compensation • Learning and Development • Culture • Flexibility • Rewards & Recognition If your organization is navigating a Reduction in Force, OneDigital can help. Connect with your OneDigital team or contact us to be put in touch with a consultant.91. https://www.zippia.com/advice/layoff-statistics/2. https://www.dol.gov/agencies/eta/layoffs/warn • Company Vision & Stability: Provide a clear, compelling reason for employees to stay and contribute to the company’s future success. • Role & Workload Adjustments: Outline any changes to job responsibilities and offer training or resources to support transitions. • Employee Concerns: Encourage open dialogue, acknowledge challenges, and offer support where possible. • Recognition & Appreciation: Reinforce the value of remaining employees and their contributions to the organization’s success. By communicating openly and proactively, companies can help reduce uncertainty, boost morale, and create a more stable work environment after a RIF. The following script serves as a guide for structuring these conversations.