RIF

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In 2025, multinational giants across industries are redefining the scale and scope of global workforce reductions—with some cutting tens of thousands of jobs at a time in particular divisions, shuttering certain factories worldwide, moving to different countries, or otherwise undertaking large-scale restructuring—and this trend is likely to press on. Indeed, the World Economic Forum’s Chief People Officers Outlook – September 2025 shows 42% expect continued turbulence in the year ahead. These sweeping moves, driven by AI disruption, economic recalibration, and strategic realignment, underscore the urgent need for legally sound, jurisdiction-sensitive approaches to reductions in force.  

Headcount reductions can be achieved using a variety of different mechanisms ranging from performance-based terminations, redundancy-based layoffs, location-based closures or other indirect strategies like attrition management, voluntary separation programs, and early retirement incentives. No matter the approach or structure for implementing a global reduction in headcount, executing a major business change while mitigating legal exposure requires a nuanced understanding of local employment laws, cultural expectations, justification requirements, local regulations impacting the treatment of equity awards, as well as potential immigration and visa implications. Missteps during the planning or execution stage can trigger material employment claims, unexpected and substantial financial and operational costs, regulatory fines, operational disruption and reputational damage.

Fortunately, there are tried and true methods to avoid most unintended effects and unwanted outcomes. Here we provide 10 practical planning tips for building your strategy when the company seeks to reduce its headcount through a global reduction in force (RIF).

The Economic Backdrop: A Mixed Outlook

Even with the uptick in layoffs, the global economy in 2025 is showing signs of resilience, with the International Monetary Fund projecting 3.0% growth this year and 3.1% in 2026. However, this modest optimism is tempered by persistent inflation, geopolitical tensions, and a surge in protectionist trade policies. According to the World Economic Forum’s Future of Jobs Report 2025, slower growth is expected to displace 1.6 million jobs globally by 2030, with automation and digital transformation accelerating the shift.

In this climate, in-house legal counsel must be proactive in managing employment risks associated with cost-cutting, restructuring, and reductions in force.

Strategic Planning Tips for Your Global RIF Playbook

1. Level-set with key business stakeholders—communicate the jurisdictional complexity of a RIF involving multiple jurisdictions.

Employment protections vary widely around the world. While at-will employment in the United States allows for relatively straightforward terminations (barring union involvement or statutory notice requirements), most jurisdictions around the world (including the majority of Europe, as well as Canada, Australia and Japan) provide mandatory protections against dismissal, which often include articulating a legally justified reason for the RIF as well as taking additional procedural steps before employees are impacted. When constructing plans for a global RIF, it’s helpful to be clear with business leaders who are not employment counsel that it’s essential to build alternate timelines and costs based on jurisdiction-specific requirements.

Along these lines, engaging with local counsel early to navigate procedural nuances is key. This helps mitigate the risk of unforeseen complications, such as delays due to mandatory consultation periods, unexpected severance obligations, or exposure to legal claims arising from non-compliance with jurisdiction-specific requirements. Timescales and costs for RIFs are likely to increase as a result of legislative changes in 2026, underscoring the importance of checking local requirements early on.

2. Pressure-test the business justification for the RIF.

The starting point for analyzing reductions-in-force is understanding the legal threshold for a justified reduction (e.g., in Japan, there must be a strong economic justification for redundancies). Only very few international jurisdictions (e.g., Singapore and Switzerland) do not require employers to show specific grounds or justification for termination.Continue Reading Cutting Costs Without Cutting Corners: 10 Practical Tips for Managing Legal Risk in Global Reductions in Force

Reductions in force (RIFs) are rarely straightforward—especially for multinational employers. Navigating conflicting labor laws, benefits obligations, cultural expectations, and logistical hurdles requires strategic planning and coordination to stay compliant and minimize disruption. 

In this video chat, our Employment and Compensation attorneys unpack the legal and practical challenges of RIFs inside and outside of the US.

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