Laid Off vs. Fired: What’s The Difference?

Did you get laid off or did you get fired? Do you know the difference? If not, we’re here to help. In short, laid off refers to the event when an employer can no longer keep you on the payroll. This can happen under a variety of conditions. From the employer not needing that role to be around any longer, to the employer not being able to pay you. Fired is when you are terminated from the company for either poor performance or an actionable reason. This reason could be anything from sexual harassment to breaking a code of conduct in the workplace.

Let’s dig right into the main differences with being laid off vs. being fired and what you should do in the event either one happens to you.

Laid off and why it’s important to know this

Being laid is a fairly common occurrence. This tends to happen when downsizing occurs. Downsizing is when the company you are currently employed at had potentially unpredicted losses on the business which they have to recover from. This is the most common case when companies simply don’t have enough money to pay for all of their employees. Thus, downsizing of the workforce or headcount of the company transpires. If your company is about to engage in mass layoffs, corporate closings or otherwise, you will be given notice thanks to the Worker Adjustment and Retraining Notification (WARN) Act.

When you are laid off, future employers tend to look kindly upon this. This is because you were not fired or terminated for poor performance (which we’ll get into in a moment). When you are laid off, remember that you have to position this to your future employer and be sure you articulate you are in search of a job because of the fact that you were laid off. It’s imperative that during your future job interviews you express the reasons the company decided to start reducing the workforce. This is because many potential employees may fib about the fact that they were laid off when in actuality they were terminated. Because this is such a problem, it’s important to inform the hiring manager of the reason so that it sounds more believable, even if it’s true.

If you are laid off from your company there are a few benefits that you’ll have. Firstly, you’ll be given a severance package. This is compensation to help you find ample time to get a replacement job. This could be two weeks pay to three months pay, depending on your role and the company. You will also be qualified for government unemployment benefits in the event that you are unable to find a replacement job fast enough.

Lastly, you qualify for COBRA as well (The Consolidated Omnibus Budget Reconciliation Act), this is a government-sanctioned program which allows you to retain some or most of your employee health benefits for some period of time while you transition to your next role. You must file for COBRA within 60 days of losing your job and you will be eligible for up to 18 months of coverage.

Remember that emotionally, being laid off can be quite the curveball in your life plan. But that it is a fairly common occurrence. In fact, there is roughly a 56% chance that you will be laid off within the next 15 years of your employment journey. Generally speaking, the selection process for being terminated can be either at will or by a department. It is not uncommon for an employer to look at their bottom 15% of performing employees and decide they’d like to end their employment status with the company.

But in most cases, departments with the highest spend are going to be the ones that are looked at first. Spend in this capacity means headcount or the number of employees that work within that department. The human resources and leadership teams will assemble to assess if that department could operate under more stressful conditions, usually pertaining to less headcount and more work per employee.

There may not be an exact rhyme or reason for the selection process, though. In the event that you are not offered severance or extended benefits for your departure, you should absolutely ask and address your employer about this. You should be given severance by law.

Being terminated or fired and what to do

If you’ve been terminated or fired, you should know the difference through the way your human resources department handled the situation. Those who were laid off may be let go in a group, meaning there will be one or more people part of the lay off process. They will be provided severance and will be eligible for unemployment compensation.

If you were terminated, this means that you may have done something incorrectly and the company has decided that you are no longer a quality fit for their organization. You will not be eligible for unemployment compensation and you will most likely not receive notice before you are terminated. This can be a difficult and emotional situation to handle then navigate going forward.

The first thing to do is to understand and reflect on why you were terminated. Did you violate a code of conduct or ethics within the workplace? Did you overstep? Did you communicate poorly? Did you get violent? Did you use confrontational language? Was your performance poor? Did you not truly understand how to do the job you signed up for? All of these things do happen, but they are area’s to make improvements for yourself as you begin to think about your next journey.

It is advised that you spend some time thinking through these mistakes before you jump right into the job market and begin searching for your next role. Future employers and hiring managers will be able to tell that you’ve been terminated, as there tends to be an emotional way that past employees speak about their employment history in the events they’ve been terminated. Avoid this mistake by taking the time to reflect, calibrate, and decide which path is best for you.

There are some area’s of protection that you have against employers who feel as though they’ve wrongfully terminated you. But in general, these laws are quite cumbersome for both the employee and the employer. And it is advised that you do not attempt to move forward on them unless you have been advised to do so by an attorney.

In most cases, employers can, in fact, fire an employee without cause. It can vary depending on the state. If you feel as though you’ve been terminated due to your sexual orientation, race or gender, then you may have a case against your employer. You should seek legal counsel immediately and ask for their opinion on the matter.

In the event that you were fired due to poor performance, now is the time to sit down and think about the fact that you may not be a great fit for the role you applied for and landed. This happens. Often, this occurs when our aspirations are greater than our abilities. All of us want to try new things and grow. But when our abilities to meet the needs of the job aren’t aligning with what the employer expects, there may have been some miscommunication over expectations of outcomes.

When this happens, take time to think through if it was the employer's expectations or your own that were misaligned. If it was yours, try to think about taking one step back and applying for roles in the future which may be either nearby or next to the role you were doing. That way you can explain to your the person interviewing you that you were terminated because you got ahead of yourself and this was a mistake that you made but have decided to grow past it.

When you are terminated, there will be clear lines which indicate so. And your next steps for getting back out into the job market to need to consider the potential interpretations of the hiring managers when you are interviewing. If the job you were in was short enough, you may want to eliminate that from your work history altogether. That way you can avoid that conversation altogether. Remember that reputation is a powerful source of truth in today's workforce. It is critical that you are honest and open about your past. And that you have reflected upon past events in such a way that when you speak of them, they come across in a calm and well-positioned manner. Everyone makes mistakes, and there will be future opportunities regardless of those mistakes.

author: patrick algrim
About the author

Patrick Algrim is an experienced executive who has spent a number of years in Silicon Valley hiring and coaching some of the world’s most valuable technology teams. Patrick has been a source for Human Resources and career related insights for Forbes, Glassdoor, Entrepreneur,, SparkHire, and many more.


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