Terminated vs. Laid Off: What’s The Difference


terminated vs. laid off

Most people rely on their employment to pay their bills and to live. Without money from their employment, many people would struggle to stay afloat with today’s cost of living.

That is why losing your employment is such a stressful situation, regardless of the manner in which someone was let go.

And there are multiple different terms that refer to losing your job. And each of them have slightly different meetings, such as being fired vs. being let go.

To that end, this article is going to unpack being terminated vs. laid off. We’ll look at what each of them mean and then unpack the differences between the two.

Let’s dive in.

Terminated: What Does It Mean?

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When someone is terminated from their job, it means that their employment was ended, often involuntarily. Some common grounds for termination include poor performance, attendance problems, behavior issues, and more. Employees may also be terminated for ethical issues and misconduct.

Each company has established procedures that they’re to follow. This usually involves issuing a warning before terminating an employee. However, each company will have their own process, and warnings may be singular, triple, or even non-existent depending on the cause of termination.

For example, some companies have a zero-tolerance policy against things like drug use or assault of any type. This would allow the employer to terminate without warning. Your employee handbook will outline your employer’s termination policy and process. Your local government will also outline what your employer is legally able to terminate you over, as such is the case with discrimination of various types.

If you’re concerned that you may be on the verge of getting terminated, take a look at article on common signs that your boss wants you to leave.

Laid Off: What Does It Mean?

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When someone is laid off from their job, they may think that it means they’ve been fired. Being laid off is very similar to being fired, with the caveat that it’s usually due to budget issues and is often not the fault of the employee. Often, when a company lays off employees, they do it to re-gain financial standing and stability, or to stabilize another factor. Once this factor is stabilized, the company will pause layoffs, and many will start to hire again. 

Layoffs are used as a no-fault method of termination.  This is usually done to cut costs. Employees are a huge source of spending, and when a company is experiencing financial hardship, they’ll often look to layoff employees to cut costs.

Departments that are often targeted first are HR, marketing, and administrative functions. Basically, functions where spend is likely to be cut during difficult financial times anyway. As an example, if you’re doing layoffs, you’re unlikely to be hiring as many net new employees, and if you’re not hiring as many net new employees, then you don’t need as many recruiters.

Is Being Terminated The Same As Being Laid Off?

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Being terminated is usually different from being laid off in a few ways. Termination usually means that your employment has ended for good with that company and often on unfriendly terms. Whereas being laid off usually means that you’re being asked to stop working for the company, usually at no fault of your own. Termination often happens due to an unpleasant set of circumstances, whereas layoffs are at no fault of the employee. While both end up in unemployment, the terms of said unemployment may differ between them.

Regardless of whether you were terminated or laid off, either situation is quite stressful and those who deal with losing a job face financial instability and hardship.  This is especially true if unemployment isn’t granted (note that it’s more common to receive employment when you’re laid off vs. terminated). This is why understanding your situation is so important, as it give you a better foot to stand on when you know what to expect.

If you’ve recently experience a job loss, and need to file for unemployment, here is a quick article on how to do so.

What’s The Difference Between Being Terminated and Being Laid Off?

bad at my job

The major difference between being terminated and being laid off is that, when you’re terminated, it is often due to some type of performance issue. When you’re laid off, it’s often a cost savings measure for the company that is not tied to your job performance.

When you’re terminated, it means that you’re not welcome to work for that employer again usually due to something you’ve done. You’re usually not able to reapply for that company for at least 1 year in most cases. When you’re laid off, you’re often encouraged to reapply for the company once they begin hiring again. Some people are even able to get their previous jobs back!

While being laid off still ends in unemployment,  it’s usually viewed as more honorable than a termination. Think of it like being honorably discharged vs dishonorably discharged from the military. The stigma that follows a layoff isn’t as great as a termination.

Both layoffs and terminations will put you out of work, and with both you’ll need to find a new job. Layoffs and hiring freezes can last a year or more, so it’s always a good idea to begin looking for employment as soon as you hear layoffs may occur. Speak with your manager about the likelihood of being laid off, and try to remain civil, you just may need to use them as a reference shortly after.

Both layoffs and terminations may result in unemployment benefits being granted. However, it depends on the conditions of the termination, as not all qualify. Your employer may fight this, which case you’ll need to file again and argue for your benefits. Not everyone will be granted unemployment benefits, so it’s wise to look for employment as soon as you can.


No matter if you’re terminated vs. laid off, you’ll likely need to find more work. This is a stressful time, but remember that help is out there.

Contact your local labor agency if you feel you’ve been terminated unfairly, and always try to remain as cordial as possible with your ex-employer and co-workers should you need references in the future.

While termination and layoff are somewhat different, they both result in loss of employment, whether at fault or not.  Losing your job for any reason is something most will face at some point. Take this opportunity to start fresh, your next adventure is out there.

About the author

ted wilson
Ted Wilson

Ted Wilson is a writer and marketing specialist with over thirteen years of experience. He has worked with clients of all types, including major brands like Bed Bath & Beyond. He has years of experience writing for career management and education websites and often tells clients seeking to advance their career that passion and consistency are key.

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