裁员 (cái yuán) literally combines 裁 (cái), meaning 'to cut' or 'to reduce', and 员 (yuán), meaning 'person' or 'staff member'. Together, they form a verb meaning 'to lay off employees' — that is, to dismiss workers, usually for economic or restructuring reasons. It is commonly used in business, media, and official announcements, and carries a formal, often serious tone.

This term typically appears in contexts involving company downsizing, corporate restructuring, or economic downturns. It is not used for individual resignations or firings due to misconduct — those are expressed with words like 辞职 (cízhí) or 解雇 (jiěgù). 裁员 implies a systemic, organization-wide decision rather than a personal employment issue, and it frequently appears with numbers or percentages (e.g., 裁员20%) to indicate scale.