The Rising Tide of RIFs: What Employers Need to Know Amidst AI Integration

Quick Hits

• A new analysis indicated that October 2025 marked a significant increase in reductions in force, highlighting the legal complexities employers must navigate in compliance with federal and state regulations.
• As companies consider mass layoffs influenced mainly by the integration of AI, it is crucial to address potential discrimination claims and explore alternatives like voluntary separation plans to mitigate risks.

Employers announced RIFs affecting more than 153,00 in October, a 175 percent increase from October 2024 and nearly triple the number in the prior month (a 183 percent increase from September 2025). RIFs have impacted industries across the board, but multiple major technology and retail companies have reportedly announced reductions in recent weeks.

While a RIF may be necessary for businesses to adapt to changing economic circumstances, implementing a mass RIF can be a complex process that involves compliance challenges with federal, state, and local regulations. Here are some considerations for employers.

Federal, State, and Local Notification Requirements

The federal Worker Adjustment and Retraining Notification (WARN) Act generally requires covered employers to provide at least sixty days’ notice before a mass layoff or plant closing. Several analogous state laws, often referred to as “mini-WARN Acts,” provide similar but often different or additional requirements. There are also several state-specific rules governing the termination of employment, including requirements for final paychecks and additional notices.

Potential Discrimination Claims and Statistical Analysis

RIFs can often lead to discrimination claims, alleging that employees included in the reduction and selection criteria are disproportionately affected workers in protected classes, such as those based on age, race, gender, or national origin. While the Trump administration has sought to end federal enforcement of antidiscrimination laws based on disparate impact theories, employees can still bring claims alleging this theory of liability under federal law, and several state agencies continue to enforce such claims.

Employers may want to focus on objective factors for selecting workers targeted in a RIF that are less likely to be tied to a protected class, such as length of service. Employers may also want to use statistical analyses during the planning phases of a RIF to assess whether a planned RIF might give rise to discrimination claims.

Severance Agreements and Voluntary Separation Plans

As an alternative to an involuntary RIF, employers may want to consider offering voluntary separation plans and severance packages to incentivize workers to separate from the employer voluntarily. Employers may want to ensure that severance agreements contain a release of claims and comply with state laws, which govern what terms are enforceable and which are not.

Age Discrimination Concerns

Both the Age Discrimination in Employment Act (ADEA) and the Older Workers Benefit Protection Act (OWBPA) provide specific protections for workers aged forty years and older, particularly concerning severance packages and the inclusion of a release and waiver of claims. Specifically, the OWBPA requires that employers offer employees forty years old and older, who are included in a group layoff, a forty-five-day period to consider the release and seven days to revoke their agreement. The law further requires employers to engage in additional disclosure regarding the age and title of employees selected for a RIF.

Next Steps

AI is expected to be increasingly adopted by employers to improve efficiency and the quality of products and services offered. However, this is a rapidly changing space as technology develops quickly, and it is not yet clear how many jobs could be impacted or displaced. Employers that do implement RIFs may want to engage in careful planning and consider their compliance obligations.

Ogletree Deakins’ RIF/WARN Practice Group will continue to monitor developments and will provide updates on the Cybersecurity and Privacy, Diversity, Equity, and Inclusion Compliance, Reductions In Force, Retail, Technology, and Workforce Analytics and Compliance blogs as additional information becomes available.

In addition, the Ogletree Deakins Client Portal provides subscribers with updated WARN and mini-WARN law summaries, as well as other information related to Terminations and RIFs, including Termination Notices and Final Pay Upon Termination requirements. For more information on the Client Portal or a Client Portal subscription, please reach out to clientportal@ogletree.com.

Follow and Subscribe
LinkedIn | Instagram | Webinars | Podcasts