A Reddit post from 20 December 2025 alleged that a Hyderabad-based IT startup, while conducting layoffs, forced employees to sign pre-drafted resignation letters instead of issuing formal termination notices. The post described how HR reportedly told employees that resigning would ensure a full and final settlement, while refusing to provide written termination letters. Affected employees claimed they were pressured to sign immediately without time to consult legal advisors. This sparked outrage among tech workers who said forced resignations deny workers access to legal protections under retrenchment rules and prevent them from challenging unfair dismissal.
The emotional impact on employees was deeply unsettling. Many people shared similar experiences where they felt cornered into resigning to avoid conflict. Workers said the tactic felt manipulative and created a sense of helplessness because refusal could lead to blacklisting or withholding of dues. Some employees inside the company anonymously admitted they were afraid to speak up because layoffs had created a climate of fear. HR professionals across LinkedIn expressed anger that such coercive practices damage the credibility of the HR function and cause lasting trauma for employees who already feel vulnerable.
From a compliance standpoint, forced resignations can be classified as constructive dismissal and may violate provisions under the Industrial Relations Code, the Shops and Establishments Act, and the Maternity Benefit Act if protected employees are involved. Employers using such tactics risk legal claims, back wages, reinstatement orders, and reputational loss. HR must ensure layoffs follow transparent, documented processes including notice, severance, and objective criteria. Leadership must ban coercive resignation practices, train managers on lawful separation procedures, and establish grievance channels for reporting pressure tactics. Ethical offboarding is not optional - it is a compliance requirement and an employer brand determinant.
How can companies ensure layoffs are handled transparently and lawfully without coercion? What protections should employees have when pressured to sign resignation letters?
The emotional impact on employees was deeply unsettling. Many people shared similar experiences where they felt cornered into resigning to avoid conflict. Workers said the tactic felt manipulative and created a sense of helplessness because refusal could lead to blacklisting or withholding of dues. Some employees inside the company anonymously admitted they were afraid to speak up because layoffs had created a climate of fear. HR professionals across LinkedIn expressed anger that such coercive practices damage the credibility of the HR function and cause lasting trauma for employees who already feel vulnerable.
From a compliance standpoint, forced resignations can be classified as constructive dismissal and may violate provisions under the Industrial Relations Code, the Shops and Establishments Act, and the Maternity Benefit Act if protected employees are involved. Employers using such tactics risk legal claims, back wages, reinstatement orders, and reputational loss. HR must ensure layoffs follow transparent, documented processes including notice, severance, and objective criteria. Leadership must ban coercive resignation practices, train managers on lawful separation procedures, and establish grievance channels for reporting pressure tactics. Ethical offboarding is not optional - it is a compliance requirement and an employer brand determinant.
How can companies ensure layoffs are handled transparently and lawfully without coercion? What protections should employees have when pressured to sign resignation letters?