Layoffs are a common practice in the business world. More than once, an organization will find it difficult to keep up with the changes in the business environment. When faced with a difficult operating environment, business often opts to restructure in order to reduce the cost of operations. There are different methods of restructuring and layoff is one of the most viable methods of restructuring. However, the layoff is usually a difficult exercise for any company because it is challenging to determine who should be laid off and who should be retained in the organization. The two contesting basis of layoff is seniority or productivity. However, the organizational layoff should be based on performance rather than on seniority because the aim of the layoff is to reduce the cost of production and at the same time increase productivity.