Reduction In Force Toolkit

Businesses around the world face economic challenges for a wide variety of reasons. Companies of all sizes must adapt quickly in response to unpredictable economic shifts that can impact revenue and cash flow, sometimes requiring drastic actions to maintain financial stability.

Many organizations may find it necessary to reassess their cost structures to protect the health—and, in some cases, the survival—of their enterprise. This is especially true for startups, which often operate in periods of planned unprofitability as they grow, meaning unexpected contractions in revenue can significantly increase cash burn and pressure operational resilience.

Personnel costs—including headcount, facilities, contractor expenses, payroll taxes, and employee programs—typically make up more than 80% of business expenses. Therefore, meaningful cost adjustments often require managing these expenses.

This reduction in force (RIF) toolkit provides frameworks and templates specifically designed for startups needing to re-evaluate staffing levels. Although large, complex organizations may need additional detailed planning, this toolkit is targeted to organizations with:

• 100-1000 employees

• distributed workforce across multiple locations

• a need to make substantial adjustments to staffing levels (rather than less severe actions like hiring freezes or suspended bonuses)

• limited Human Resources infrastructure and leadership experience with organizational realignments and staff reductions

A word of caution: while these templates have been built with legal and compliance requirements in mind, each organization’s situation is unique. Ensure all employment actions and related documents are reviewed by legal counsel before implementing a reduction in force.