Massive federal workforce reductions (once a rare event) have been featured prominently in the news lately, along with reports of criticism about the way they are occurring. Will private companies follow suit? Some economic signs, such as the continuing low unemployment rate, do not point in that direction. However, layoffs increased 28% in January as compared to the previous month, and WARN filings, as well as increasing company announcements of projected future layoffs, tell a different story.

Moreover, short-term causes, such as the impact of tariffs and cuts in government contracting, as well as slightly longer-term developments such as the effects of artificial intelligence, suggest more workforce reductions may be coming in the near future.

While no one likes a reductions-in-force (RIFs), there is a right way — and a wrong way — to conduct them. RIFs require meticulous planning and execution. While each job action must be analyzed according to its unique facts and circumstances, the following steps can promote fairness, minimize the disruption, stabilize morale, and reduce legal risks in conducting a RIF:

1. Continue to Employ Good Performance Management: This may reduce the number of necessary reductions and make the decisions easier or harder (e.g., if everyone is rated “excellent” on annual performance reviews, they do not function as useful tools in the RIF context).
2. Consider Other Options: Is a voluntary program an option? Can the company achieve the cost...

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