Last In First Out (LIFO) is a method of inventory accounting that assumes that the last items purchased are the first items sold. This means that the cost of goods sold (COGS) is based on the most recently acquired inventory, while the value of the inventory that remains in stock is based on older, lower-cost inventory.

In the context of employment, LIFO is a method of determining which employees will be laid off in the event of downsizing or restructuring. Under a LIFO system, the most recently hired employees are the first to be laid off, while more senior employees are retained.

LIFO is often used in industries where there is a high degree of turnover, such as retail or fast food, as it allows employers to quickly adjust their workforce in response to changing business conditions. However, LIFO can be controversial, as it can result in younger employees being unfairly penalized, while older, more experienced employees are protected.

There are alternative methods for determining which employees to lay off, including first in, first out (FIFO), which prioritizes seniority, and merit-based systems, which evaluate employee performance and skills. Ultimately, the choice of which method to use will depend on the specific needs and priorities of the employer, as well as legal and regulatory requirements in the relevant jurisdiction.

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