Crowdsourcing Solutions

Laid Off vs Fired: What is the Difference and Why it Matters?


Technically speaking laid off and fired have a thin line of difference in meaning. Both are used depending on the prevailing situation.

When a company is under a loss or financially incapable of maintaining employees then the term ‘lay off’ is used to terminate the employees.

Where as in a company if there are problems faced because of an employee or the company finds the employee at fault for unethical behavior/ differences in personality, etc during his/her tenure in the organization, the company uses the term ‘fired’ to terminate the employment of that employee.

Let us dive deep into this scenario to know what could be the major reasons for an employer to either lay off or fire an employee from the organization.

laid off fired differenceReasons Behind Getting Laid off:

Lay off happens generally with more than one employee. Here the situation may force the company to terminate employees for any of the following reasons.

1. Re-sizing the team:

Companies review or revisit the strength of their staff usually when there has been any financial crisis or when they want to cut the cost of employment to accommodate new projects in hand or when the work load has reduced or when the projects are taken back by the clients.

These reasons become the force for an employer to lay off his employees to ascertain the costs and strength of employees in a company.

2. Cost cutting:

laying off workers to cut costs

Another major/important and common reason for companies to reduce or lay off employees is for reducing the cost.

Although having projects or work in hand, because of reducing the cost for the company, employers lay off employees.

3. Relocating the company:

When companies move to a different location, they lay off employees. This also has a huge impact of being laid off.

Generally companies do compensate a nominal amount to such employees.

4. Amalgamation:

When two companies come into an agreement of amalgamation or merger it is natural to lay off employees.

In this scenario, the two companies are merging and hence they need not have two similar departments for their organization. Hence this situation too leads to laying off employees.

5. Less work:

When projects in a company are less or work load is reasonable and less there are chances where employees get laid off.

In either of the case above, companies mostly issue a notice in advance to employees giving them time to search for jobs outside the company or announce a reasonable compensation to employees or offer the employees to recruit them back once the company is all set right.

Reasons Behind Getting Fired:

reasons for getting firedFired, is a term used in companies when an employee’s position in the company is considered not required or necessary for various reasons based on personal qualities or professional behavior that could be hindering the work place.

We also need to understand that an employee may get fired for a specific reason.

Having said this, there are many reasons from being simple to difficult for an employer to fire an employee.

Let us go through some major scenarios where an employee gets fired or terminated:

1. Unethical behavior:

Employees are recruited with certain norms in place. During their induction period they are advised on certain basic company rules and ethics that need to be followed by every employee.

However in any such case where the employer is found guilty of behaving unethically or disruptive to the work place he/she is fired.

Some of these flaws could be possession of alcohol during work, damaging company property, misconduct with fellow employee/employer, stealing office utilities etc.

2. Unorganized and irresponsible behavior:

During the course of work when employees are found unorganized or irresponsible for their behavior, they get fired.

In a team, when even one employee does not maintain a good work flow it hinders the growth of the team or even the growth of the company.

Being unorganized results in bad maintenance and being irresponsible results in bad efficiency and productivity of the company outcome.

3. Poor performance:

poor performance at work

An employee may be good at behavior, company ethics, and people’s person and so on, but when it comes to work if the person is consistently showing poor performance which does not anywhere touch close to the Service Level Agreement (SLA) target, then the employer will be forced to fire the employee.

4. Personal utility out of company property:

Many employees tend to use office equipments or things for personal utility (may be for business also). This could lead the employers to fire employees.

5. Leave policy:

Employees are given a certain amount of fixed holidays in a year. Post these holidays when employees apply leave, it is considered as loss of pay.

Well, even after repeated notification or warnings if the employee tends to take time off or leaves regularly affecting the job, employees get fired.

6. Violating company policy:

violating company policy unemployment Companies give ample space to seek help from their procedures and policies but when these are manipulated to achieve goals and targets in shortcuts or to cover one’s fault, there could be serious problems involved.

Hence this is another major reason why employees may get terminated.

7. Violating privacy policy:

There have been cases where the employees have used the company’s information (such as professional details) on social networking sites and disclosed sensitive matters or facts online.

Well, above are some of the important out of many reasons for firing an employee.


Hence by looking into the above case studies or scenarios we can conclude that both the terms are technically two different aspects. Getting fired or getting laid off is a sensitive issue to the employee.

Keeping your basic professional morals in place you can avoid getting fired to a great extent. And keeping yourself updated with the company’s progress or status in the market you can avoid getting hooked into the net of ‘lay off’.

Please do care for suggesting additions to this script if any, also you are allowed to provide positive and constructive feedbacks.