[ley-awf, -of]
the act of dismissing employees, especially temporarily.
a period of enforced unemployment or inactivity.

1885–90, Americanism; noun use of verb phrase lay off

lay off, layoff. Unabridged
Based on the Random House Dictionary, © Random House, Inc. 2014.
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Word Origin & History

also lay off; 1889, "rest, respite;" from lay (-) + off. Via seasonal labor with periodic down time, it came to have a sense of "temporary release from employment," and by 1960s was being used somewhat euphemistically for permanent releases of masses of workers by employers.
Online Etymology Dictionary, © 2010 Douglas Harper
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American Heritage
Cultural Dictionary

layoff definition

The temporary or permanent removal of a worker from his or her job, usually because of cutbacks in production or corporate reorganization.

The American Heritage® New Dictionary of Cultural Literacy, Third Edition
Copyright © 2005 by Houghton Mifflin Company.
Published by Houghton Mifflin Company. All rights reserved.
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Example sentences
By the second week of the crisis, résumés flood the online databases, and the
  layoff announcements in the dot com sector begin.
Declare financial exigency, or whatever in your system must be declared, to
  permit the layoff of faculty and staff members.
Layoff rates peaked and declined, but firms still had little interest in hiring.
If the company is large, they could layoff workers and squeeze more
  productivity out of others.
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