An individual can face termination of employment, or job loss, for one of many reasons.

The most drastic termination of employment is involuntary termination, in its most severe form known as "firing", "sacking", "canning", or "shit-canning". A less severe form is to be laid off or "downsized", which is usually not strictly related to personal performance but economic cycles or the company's need to restructure itself.

In the postmodern risk economy, a large proportion of Americans will be laid off at some time in their life, and often not for reasons related to performance or ethics.

Firing an employee is expensive and risky in that firings require extensive documentation (in the event of a wrongful-termination lawsuit), and because fired employees may sue their former employers, disclose trade secrets to competitors, or expose illegal practices. Finally, in the United States, unemployment benefits are financed by companies, and a firm's unemployment costs increase with each worker laid off or fired.

Types of termination

Forced resignations

In addition to the risks and costs of firing an employee, firing a high-profile individual such as a school superintendent, an executive, or a public official often leads to rumor and factionalism; people who sympathized with the fired employee will be drawn against the person responsible. To avoid this, and to allow the dismissed employee to "save face" in a more "graceful" exit, the employer will often ask the employee to resign "voluntarily" from his or her position. If the employee chooses not to resign, the processes necessary to fire him or her will be pursued, and the employee will usually be fired. It thus becomes unclear whether or not the resignation was forced or voluntary, and this opaqueness benefits both parties.

High-profile individuals, when forced to resign from a job, will often claim that they resigned over "creative differences" or "to spend more time with my family".

Changes of conditions

Firms that wish for an employee to exit on his or her own accord, but do not wish to pursue firing or forced resignation, may degrade the employee's working conditions, hoping that he or she will leave "voluntarily". The employee may be moved to a different geographical location, assigned to an undesirable shift, given too few hours if part time, demoted, or relegated to a menial task, or assigned to work in uncomfortable conditions. Other forms of manipulation may be used, such as being unfairly hostile to the employee, and punishing him or her for things that are deliberately overlooked with other employees.

Such tactics may amount to constructive dismissal, which is illegal in some jurisdictions.

Layoffs and furloughs

Finally, termination of employment can happen as a result of layoffs, also known as "downsizing" or "redundancy", which are not firings. A laid-off employee's job is terminated and not re-filled, because the company wishes to reduce its size or operations, not for performance-related reasons. In rare cases, laid-off employees are re-hired by their respective companies, though by this time they have usually found new jobs.

See also: furlough