Top 5 Large-Scale RIF Mistakes to Avoid in 2026 for Multinational Employers

00:00

24:53

Quick Hits

• Multinational employers planning workforce reductions must complete required consultations before making any global announcements or cutting system access.
• Many countries require mandatory government notifications even for single terminations, not just mass layoffs.
• A global reduction in force is not a single event—it is a coordinated series of local processes, each with its own rules, timelines, and execution formalities.

This U.S.-centric approach, when implemented outside the United States, routinely fails and the consequences can be severe. Invalid terminations, injunctions, penalties, and significant liability result when employers overlook the legal requirements that govern dismissals in other jurisdictions. The following are the five most common and costly mistakes.

Mistake #1: Announcing and Acting Before Consultation Is Complete

Many employers do not realize that in jurisdictions with works councils, they cannot make a final decision or communicate that decision until consultation is complete. This means no global announcements, no cutting of system access, no updating of organizational charts, and no notifying managers or colleagues.

Consultation must occur while the proposal remains genuinely open to change. Presenting employees or works councils with a proposal fait accompli—even if labelled as “consultation”—may render the entire process defective. In many jurisdictions, this results in injunctions halting the layoffs, substantial penalties, or terminations being declared invalid.

The mistake is not just failing to consult with the works council, it is failing to understand that consultation must be completed before any external signals suggest the decision is final.

Mistake #2: Underestimating Consultation Timelines

Employers accustomed to U.S.-style reductions in force (RIFs) routinely underestimate the time required to lawfully complete consultations. Collective redundancy regimes, triggered once statutory thresholds are met, commonly require:

• Prescribed minimum consultation periods
• Specific information disclosures
• Completion of consultation before notices are issued

Individual consultation obligations may also apply and must be conducted meaningfully, not as a box-ticking exercise. Rushing these processes to meet a global announcement date is a recipe for invalid terminations.

Mistake #3: Missing Mandatory Government Notifications—Even for Single Terminations

Many employers do not realize that some countries require mandatory government notifications even when dismissing a single employee, not just in collective redundancy situations. In many jurisdictions, collective redundancy thresholds trigger notification requirements and statutory waiting periods during which dismissals cannot take effect.

Common mistakes include:

• Assuming notification requirements only apply to mass layoffs
• Filing notification after notices have been issued
• Overlooking mandatory standstill periods

A global RIF communication strategy that ignores these requirements can derail the entire process.

Mistake #4: Assuming Employers Can Unilaterally Pay in Lieu of Notice or Use Garden Leave

Even sophisticated global employers sometimes assume they can simply pay employees in lieu of notice or place them on garden leave to achieve an immediate departure. In many jurisdictions, neither is permissible without the employee’s consent or express contractual authority.

Before assuming immediate separation is possible, employers need to confirm:

• whether the employment contract expressly permits pay in lieu of notice (PILON);
• whether local law recognizes and regulates such payments; and
• whether placing employees on garden leave requires their consent.

Improperly relying on PILON or garden leave, without authority, may not only expose the employer to damages but can affect the validity of the termination itself.

Mistake #5: Getting the Termination Notice Wrong

Even if employers follow every other step correctly, the termination can be completely void if the notice is not signed properly. Many employers do not appreciate how technical—and unforgiving—this requirement can be.

Critical questions include:

Who must sign?

Does local law or do corporate rules require a specific person or multiple persons to sign the termination notice? A notice signed by an unauthorized individual may be invalid.

How must they sign?

Is a simple electronic signature sufficient? Is a qualified electronic signature (QES) required? Or must there be a wet ink signature? Using the wrong form can invalidate the notice entirely.

How must the notice be delivered?

Must the termination notice be delivered in person, by registered mail, or through another prescribed method? When is a termination notice deemed legally received?Choosing the wrong delivery vehicle can upend the termination.

An execution process that works in one country, or even for one type of document, may render a termination notice void in another. This is one of the most technically avoidable mistakes, yet one of the most common.

Avoiding These Mistakes: Planning Jurisdiction-by-Jurisdiction

Global RIFs require more than a communication strategy, they require a legal sequencing strategy. Employers that treat cross-border layoffs as a single coordinated event may experience failure in their RIF initiatives.

Careful jurisdiction-by-jurisdiction analysis, conducted early in the planning process, is essential to identify consultation triggers, notification requirements, permissible payment alternatives, and execution formalities before global timelines are set.

The employers that avoid these mistakes in 2026 will be those that understand that a global RIF is not one event; it is a coordinated series of local processes, each with its own rules, timelines, and formalities.

Ogletree Deakins’ Cross-Border Practice Group and Global Reorganizations Practice Group will continue to monitor developments and will post updates on the Cross-Border, Global Reorganizations, and Reductions in Force blogs as additional information becomes available.

Shirin Aboujawde is a shareholder in the New York office of Ogletree Deakins, and a partner in the firm’s London office.

Peg Ventricelli, a practice assistant in the Stamford office of Ogletree Deakins, contributed to this article.

Follow and Subscribe
LinkedIn | Instagram | Webinars | Podcasts