Was I laid off, downsized, or fired – or was my job eliminated? Employment attorney looks at the tricky world of staff reductions

Media Contact: Barbara Fornasiero, EAFocus Communications, 248.260.8466, barbara@eafocus.com

Detroit---March 26, 2026---As recently reported, the first quarter of 2026 has seen U.S. companies announcing major layoffs in industries across the spectrum. Whether due to AI, post-pandemic rightsizing, industry shifts, consumer trends or economic concerns, the dreaded term, layoff’, is back in full force in the business vernacular. But the term can be confusing. Deborah Brouwer, managing partner of Detroit-based management-side labor and employment law firm Nemeth Bonnette Brouwer PC looks at the lexicon of job reductions.

Performance-based layoffs? Likely not.

“During the pandemic, many companies hired hundreds or more people in a relatively short period of time. When hiring is done quickly – or rushed – it’s not unusual to have a larger number of underperformers than when a typical hiring pace is followed, or to eventually realize the company needs to adjust for normalized demand through layoffs,” Brouwer said. “There are multiple reasons why an employee might be the wrong fit for the job – or the company. Those deemed underperformers may have been hired for the wrong position or not given adequate supervision or training, and sometimes the additional individual’s contributions to the team are no longer needed, through no fault of the employee. In these situations, losing a job may fall under a variety of job loss categories.”

That being said, Brower adds that when a headcount reduction is required across the board, performance may be a consideration in identifying workers to lay off, though typically the first assessment is where the work is, and how many people are needed to do it.

“Within a department that is overstaffed, layoffs often are done by seniority – the classic last in, first out,” Brouwer said. “Companies also look at whether a given worker has a range of abilities and could handle additional or different tasks. Rarely do companies announce massive layoffs as all performance based, and for good reason. It is probably not entirely accurate and can create ill will and potential litigation against the employer and potentially hinder the employee’s opportunities to find new employment.”

Wait. Was I laid off or fired?

Brouwer also noted the increased use of the term layoff, and explained the difference between layoffs firing, and job elimination.

“A layoff usually refers to a bulk reduction in force (RIF) prompted by economic influences. Generally, such layoffs are permanent,” Brouwer said. “Situations where an employee has some contractual right to be recalled to work typically occur in collective bargaining/manufacturing settings, where there are frequent ups and downs in demand. Firings, on the other hand, are performance or behavior based. Further, if fired for a violation of company policy, an individual may not be able to collect unemployment, while laid off workers usually are able to do so.”

Brouwer adds it is not uncommon for layoffs to be prompted by the elimination of positions and roles, especially in the age of AI and its accompanying efficiencies.

Announcing layoffs

“Layoff announcements are difficult for employers to make – and for employees to hear - and need to be handled with great sensitivity,” Brouwer said. “And because bad news travels fast, it must be anticipated that major layoff news will be immediately shared with local and national media and online social platforms for retelling, often with erroneous or partial information. To the degree that it is possible without revealing confidential or strategic information, layoff announcements should be made with transparency and at least some details surrounding what prompted the layoffs.”

An employee’s first concern is almost always financial, Brouwer added.

“Address the financial issue fully and immediately and also offer information on severance and health insurance continuation, if applicable, and unemployment benefit access. As with the initial layoff announcement, clear communication – as well as contact information for questions - is key. A lack of communication makes employers a target for lawsuits and disparagement.”

About Nemeth Bonnette Brouwer PC

Nemeth Bonnette Brouwer specializes in employment litigation, traditional labor law, workplace investigations, and management consultation and training for private and public sector employers. The firm also provides arbitration and mediation services. Woman-owned and led since its founding in 1992, Nemeth Bonnette Brouwer exclusively represents management in the prevention, resolution and litigation of labor and employment disputes.