DEFINITION of 'Furlough'

A temporary layoff, involuntary leave or other modification of normal working hours without pay for a specified duration. Furloughs are used in the military for soldiers whose new assignments have not yet been determined. For businesses, furloughs are used for a variety of reasons, like plant shut-downs, or in cases where a broad reorganization makes it unclear which employees will be retained.


In contemporary business practice, a furlough is a less permanent solution to layoffs, and are useful in situations where the economic condition is deemed to be of short duration. It is also common in situations where a business disruption is deemed to be temporary.

  1. Restructuring Charge

    A one-time cost that must be paid by a company when it reorganizes. ...
  2. Downsize

    Reducing the size of a company by eliminating workers and/or ...
  3. Layoff

    1. When a company eliminates jobs regardless of how good the ...
  4. Restructuring

    A significant modification made to the debt, operations or structure ...
  5. Rationalization

    A reorganization of a company in order to increase its efficiency. ...
  6. Unemployment Rate

    The percentage of the total labor force that is unemployed but ...
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