Being Laid Off vs. Getting Fired

This article discusses what you need to know about the distinctions between being fired and being laid off

    Author: Ranad Rashean
    Ranad Rashean
    Ranad Rashean
    I am a pharmaceutical, who decided to shift my career to be an Analyst.
    Reviewed By: Patrick Curtis
    Patrick Curtis
    Patrick Curtis
    Private Equity | Investment Banking

    Prior to becoming our CEO & Founder at Wall Street Oasis, Patrick spent three years as a Private Equity Associate for Tailwind Capital in New York and two years as an Investment Banking Analyst at Rothschild.

    Patrick has an MBA in Entrepreneurial Management from The Wharton School and a BA in Economics from Williams College.

    Last Updated:October 12, 2023

    What Is Being Laid Off vs. Getting Fired?

    Being laid off refers to a temporary or permanent termination of employment due to reasons like company restructuring or downsizing, often resulting in severance benefits.

    Getting fired, on the other hand, is a termination due to poor performance, violation of company policies, or other reasons without any associated benefits.

    There are some key distinctions between being fired and laid off, and it's critical to understand them before deciding what to say to employers.

    This is important because claiming you were laid off when you were fired for poor performance or policy violations can be risky. If the truth is discovered, employers will think you're untrustworthy and immediately dismiss your application.

    And, if you were laid off, you have to explain that you weren't fired (which would be much more severe).

    Terminations can be complex, and there can be an overlap between being fired and being laid off. They affect your eligibility for unemployment benefits and how easily you can find a new job.

    Your former employer should be very transparent about why they asked you to leave the company, so it should be easy to tell if you were laid off or fired. But, unfortunately, sometimes, it's not so easy to tell.

    This article discusses what you need to know about the distinctions between being fired and being laid off and how to determine your options if you lose your job.

    Key Takeaways

    • Being laid off is often due to reasons like company restructuring or downsizing and can come with severance benefits.
    • Getting fired, on the other hand, results from poor performance or policy violations without associated benefits.
    • Understanding the distinctions between being fired and being laid off is crucial when discussing your employment history with potential employers to maintain trust and transparency.
    • Layoffs typically result from company restructuring, financial issues, or downsizing, and laid-off employees are often eligible for unemployment benefits.
    • Unlike being fired, layoffs may be temporary, and rehiring is possible when the economy improves.

    Getting Fired at Work

    A worker can be fired for many reasons. However, unsatisfactory job performance is perhaps the most common reason for being fired.

    Workers may also be fired for:

    • Bullying their peers
    • Insubordination
    • Taking excessive time off
    • Damaging or stealing company property
    • Failing to follow their employment contract's terms

    Therefore, it's essential to understand why you were fired and know how to discuss it with potential employers. If you lie, they may think you did the worst things possible to get fired.

    A lot of states use an "at-will employment" principle: At-will employment is a work contract in which the employee can leave the company at any time, and the employer can fire the worker if they want for any reason or at any time, as long as the dismissal isn't illegal.


    Employment status can vary by state law. In some states, courts may imply an agreement of continued employment, especially if the employee performs well and there is no specific termination policy in place.

    Just because you've signed a contract doesn't mean you're not an at-will employee - contracts will specify if you're employed at will. Unless you have a written document or oral statement from your employer stating otherwise, you are assumed to be employed at will.

    When an employee is fired, they will most likely not be rehired. This permanent termination results from the employee's conduct, not the company's financial situation.

    However, it would help if you stayed calm, whatever the reason that gets you fired. If you are concerned about such a possibility, you should consider how to best respond.

    A good rule of thumb for any stressful event is to take a moment to pause, breathe, and think. Then, allow yourself to respond appropriately when you are not emotionally charged.

    Reasons for Getting Fired

    Be sure not to do these things. Some, like misconduct and theft, are obvious, while others, like using company property for personal use, may not be so obvious.

    Some of the few reasons for getting fired are:

    • Damaging the Company's Property
    • Use or Possession of Drugs or Alcohol at Work
    • Forging Company Records
    • Lying on Job Applications
    • Insubordination
    • Misconduct
    • Conflicts of Interest
    • Unsatisfactory Performance
    • Stealing
    • Use of Company Property for Personal Purposes
    • Absenteeism
    • Breach of Company Policy

    Being Laid off at work

    When an employee is let go, it usually has nothing to do with his or her performance. For example, layoffs occur when a company restructures (possibly as part of a merger and acquisition), downsizes for financial reasons, or goes bankrupt.

    The employee gets severance pay under certain circumstances such as layoffs, impending retirement, premature retirement, or any employee provided by their employer.

    Employees might receive other types of benefits like stock options, if any, any remaining salary for the month, or additional payment based on months of service.

    Employees who are laid off are generally entitled to unemployment benefits. However, in the U.S., these can vary by state - learn more here. Unlike being fired, layoffs can be temporary, and the firm may rehire laid-off employees when the economy improves.

    Layoffs can occur for the following reasons:

    • Downsizing
    • Technological Advancements
    • Outsourcing/Offshoring
    • Reorganization
    • Acquisition or merger
    • Changing business needs

    Rather than being laid off, employees may be "furloughed." Furloughed employees are expected to return to work when the furlough ends. For example, when budget negotiations stall and the U.S. government shuts down, the government furloughs its workers.


    During the furlough, the employee may be able to keep their health insurance and receive unemployment benefits.

    Being Laid Off vs. Getting Fired

    Let's take a look below to see how being laid off is different from being fired:

    Being Laid Off Vs. Getting Fired
    Basis Being Laid Off Getting Fired
    Reason for Termination Company restructuring, downsizing, financial issues, bankruptcy Poor performance, policy violations, misconduct
    Eligibility for Benefits Often eligible for unemployment benefits Eligibility for unemployment benefits may vary
    Rehiring Possibility Maybe rehired when the economy improves Unlikely to be rehired by the same employer
    Employee Performance Not necessarily related to individual performance Directly related to individual performance
    Company Transparency Reasons are usually openly communicated May lack transparency, and reasons might be unclear
    Stigma Perception Generally carries less stigma in the job market May carry a stigma, especially if it is due to misconduct

    How to Find Another Job after Being Fired?

    Maybe you're reading this article because you were fired. However, you're likely feeling scared and upset regardless of why you were fired. You might think that you will never find another job. But everyone makes mistakes, and employers know that.

    Many people are fired, and depending on why they were fired, it may not impact their ability to find a new job.

    Don't be upset or undervalue yourself; list your skills and accomplishments and ask your friends to help you brainstorm new opportunities. Then, continue to push yourself to take further steps and improve your skills.

    There are exceptions, such as employees fired repeatedly or fired in certain circumstances (e.g., harassment, theft, etc.). Depending on the reason for your termination, your confidence and sense of self-worth may diminish. Let's see how to cope with different termination situations below:

    • If you were fired for poor job performance and thought you were good enough, you might start to doubt your abilities and education. However, failing to meet the performance expectations of one company doesn't mean you're not a fit for any company in your industry.
    • If you have savings, you can take the time to advance your skills and learn new software while looking for work.
    • If you're in business, Wall Street Oasis offers live public boot camps, corporate training, and online self-study courses. There are various online resources for other fields - you need to look them up.
    • If you were fired for something entirely within your control, reflect on what you should have done to avoid being terminated and what contributed to that issue.

    In any case, before you make changes to your resume and prepare to job hunt, go over the areas where you might need to improve. This is important for your success because interviewers might ask about your firing and what you've done since.

    Researched and authored by Ranad Rashwan | LinkedIn

    Reviewed and Edited by Sara De Meyer | LinkedIn

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