Economic layoffs, simply, is enterprises cut down a number of workers due to the poor management or some other economic reasons. According to Article 41 of the Labor Contract Law, enterprises cut down 20 or more employees, or less than 20 employees but which accounts for 10% of the total number of the employees called economic layoffs. The economic layoffs should be understood from four aspects:  first, the mainly reason for layoff is economic, not the personnel reason of employees; second, it only happens in the enterprises; third, it can be taken as enterprises unilateral terminating the labor contracts; fourth, it should terminate the statutory number labor contracts in one time and fulfill the relevant proceedings.

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