Shmoop Finance

Make Moolah, Not War

Word of the day: Temporary Layoffs

Finance: What is Reduction in Force (RIF)?

While no bossman can predict the economic future of their business precisely, business owners often opt for temporary layoffs when they need a financial break.

Regular (permanent) layoffs may occur when jobs are phased out by technology, or when a business must radically change to adapt to changes in the market supply and demand.

Temporary layoffs, on the other hand, can last a week, a month, or a year, and happen when a business is in financial trouble, business is slow, or something needs fixing (old machinery, damage from forces of nature). Temporary layoffs can help businesses recoup and get back on their feet when facing some (hopefully) temporary instability.

The challenge: when companies unionize and negotiate, such that employees can't, in fact, be suddenly, temporarily laid off, companies risk bankruptcy...where everyone is then out of work.

* Coming soon...ish