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Layoff vs. Lock-out: What's the Difference?

Edited by Harlon Moss || By Janet White || Published on November 28, 2023
A layoff is the temporary or permanent dismissal of employees, while a lock-out is when employers temporarily close a workplace during a labor dispute.

Key Differences

Layoff primarily refers to the termination of employment, either temporarily or permanently, typically because of economic downturns or organizational restructuring. Lock-out, on the other hand, is an action taken by employers, usually during a labor dispute, where they prevent employees from entering the workplace until certain conditions are met.
In a layoff, employees are often let go due to no fault of their own; it might be driven by factors like declining revenues, mergers, or shifts in company strategy. However, in a lock-out, the primary reason is a disagreement between the employees (often represented by a union) and the employers, often related to contract terms, wages, or working conditions.
While both layoff and lock-out result in halted work, their implications for workers differ. Employees affected by a layoff may receive severance pay, unemployment benefits, or retraining opportunities, depending on the circumstances and region. In contrast, during a lock-out, employees might not receive their regular wages, which can further escalate the labor dispute.
In summary, layoff and lock-out both disrupt the regular flow of work. Yet, while a layoff is centered around employment termination for business-related reasons, a lock-out is a tactic in labor disputes, used by employers to put pressure on employees to concede to specific terms.

Comparison Chart


Temporary or permanent dismissal of employees.
Employers prevent employees from working during a labor dispute.


Economic downturns, organizational restructuring.
Disagreement over contract terms, wages, working conditions.

Initiated by

Employers, for business reasons.
Employers, in response to labor disputes.

Impact on Employees

Loss of job, may receive severance or unemployment benefits.
Can't work or access workplace, no regular wages.


Can be temporary or permanent.
Temporary, ends when the dispute is resolved.

Layoff and Lock-out Definitions


Termination of employment based on economic conditions.
The recent economic downturn led to massive layoffs in various industries.


An action to exert pressure on employees in labor disagreements.
The company resorted to a lock-out to push for their terms in the new contract.


Letting go of employees without prejudice.
Many employees feared the layoff rumors circulating in the office.


Employer-initiated work stoppage during a labor dispute.
The management declared a lock-out after failing to reach an agreement with the union.


A reduction in workforce often due to financial constraints.
The layoff affected many long-standing employees in the firm.


Temporary workplace closure by employers.
The lock-out lasted for two weeks before both parties reached a consensus.


Dismissal of employees due to organizational reasons.
Due to declining sales, the company announced a major layoff.


Denial of employment during negotiations.
Workers were frustrated by the unexpected lock-out.


Discharge from employment for reasons other than employee performance.
After the merger, a significant layoff was announced to avoid redundancies.


Halting operations by preventing worker access.
The factory saw a lock-out after heated disputes over wage hikes.


The act of suspending or dismissing an employee, as for lack of work or because of corporate reorganization.


Alternative form of lockout


A period of temporary inactivity or rest.


A dismissal of employees from their jobs because of tightened budgetary constraints or work shortage (not due to poor performance or misconduct).


A period of time when someone is unavailable for work.


A short pass that has been rolled in front of another player for them to kick.


A bet that is laid off, i.e. placed with another bookmaker in order to reduce risk.


The act of laying off an employee or a work force


What triggers a lock-out?

Labor disputes between employers and employees, often over contract terms or wages.

Are layoffs always permanent?

No, layoffs can be temporary or permanent based on the situation.

Who initiates a lock-out?

Employers initiate a lock-out, usually during disagreements with employees or unions.

Can an employee return after a layoff?

Yes, especially if it's a temporary layoff, employees can be called back.

What benefits can laid-off employees expect?

They may receive severance pay, unemployment benefits, or retraining opportunities, depending on regional laws and company policies.

Is a lock-out legal?

It depends on the jurisdiction, but in many places, it's a legal tactic in labor disputes.

Are layoffs performance-based?

Not usually; layoffs are often due to broader organizational or economic factors rather than individual performance.

What is the primary reason for a layoff?

Economic downturns, organizational restructuring, or other business-related reasons.

What's the difference between a lock-out and a strike?

A lock-out is initiated by employers, while a strike is initiated by employees.

How long can a lock-out last?

It varies, but it lasts until the labor dispute gets resolved or until the parties reach an agreement.

Is notice provided before a layoff?

In many places, employers are required to give advance notice, but it varies based on local laws and the size of the layoff.

Do workers get paid during a lock-out?

Typically, workers don't receive their regular wages during a lock-out.

Can layoffs be challenged legally?

Depending on the region and circumstances, employees might have legal recourse if the layoff breaches contracts or laws.

What are the effects of a lock-out on a business?

Potential loss of revenue, strained employer-employee relationships, and possible reputational damage.

How do layoffs impact company morale?

They can lead to decreased morale, increased stress, and a sense of job insecurity among remaining employees.

Are lock-outs common?

Their frequency depends on the region and industry, but they occur when labor negotiations reach an impasse.

What's the public perception of lock-outs?

They can be controversial and might be viewed negatively, especially if perceived as an unfair tactic by employers.

Why would employers choose a lock-out?

To exert pressure on employees or their union during negotiations or labor disputes.

Can a layoff be reversed?

Yes, especially in the case of temporary layoffs, employees might be rehired.

Are there alternatives to layoffs?

Yes, employers might consider options like furloughs, salary reductions, or reduced work hours.
About Author
Written by
Janet White
Janet White has been an esteemed writer and blogger for Difference Wiki. Holding a Master's degree in Science and Medical Journalism from the prestigious Boston University, she has consistently demonstrated her expertise and passion for her field. When she's not immersed in her work, Janet relishes her time exercising, delving into a good book, and cherishing moments with friends and family.
Edited by
Harlon Moss
Harlon is a seasoned quality moderator and accomplished content writer for Difference Wiki. An alumnus of the prestigious University of California, he earned his degree in Computer Science. Leveraging his academic background, Harlon brings a meticulous and informed perspective to his work, ensuring content accuracy and excellence.

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