A layoff is when a company ends workers' jobs, not because those workers did anything wrong, but because the business decides it needs fewer employees. This might happen because the company isn't making enough money, because it's changing how it operates, or because new technology can do work that people used to do.

Layoffs feel different from being fired. When someone gets fired, it's usually because they broke rules or did their job poorly. When someone gets laid off, they might have been an excellent worker doing everything right, but the company simply decided it couldn't afford to keep paying them or didn't need that position anymore.

Being laid off is difficult for workers and their families because they suddenly lose their income and have to search for new jobs. Companies sometimes lay off dozens, hundreds, or even thousands of workers at once. When this happens in a community where many people work for the same company, it can affect everyone: local stores lose customers, families might need to move to find work elsewhere, and the whole town feels the impact.

Some companies offer severance pay (money paid to a worker when their job ends) to help laid-off workers while they search for new positions.