October 8, 2011:
Four years ago the U.S. Army was ordered by Congress to expand its personnel strength 14 percent (from 482,000 to 547,000), and to do it within five years. The army got that done ahead of schedule, just in time to be ordered to reduce strength 7.5 percent, to 520,000. While the army was able to recruit the additional troops ahead of schedule, they didn't really want them. Some politicians were urging the army to expand by another 30,000 troops. All this was propelled by political and media anxiety over the short period of time troops were home ("dwell time") in between overseas assignments. In 2007, at the height of the Iraq fighting, army troops were spending a bit less than a year at home for every year overseas.
The defeat of Islamic terrorists in Iraq in 2008 meant that far fewer troops were needed. Now the dwell time is 24 months for every 12 months abroad. That problem is gone, money is tight, and the army can shed over 40,000 troops over the next five years. RIF (Reduction In Force) is what the military calls a layoff and the army hopes to avoid this. By offering early retirements, buyouts and increased retention (being able to renew your contract) standards, the army hopes to avoid just summarily firing people.
Actually, the army has started using some of these RIF policies two years ago. That was when the army revived a pre-September 11, 2001 personnel policy, by letting troops out early. For example, the new rule allowed a unit that was about to go overseas, to give troops with less than 180 days left in the service, the option of getting out of their enlistment contract up to 90 days early. Soldiers who took this option had "Reduction In Force" (RIF) listed as "reason for separation" on their discharge papers. Historically, a RIF was a process whereby the army discharged a large number of troops at the end of a war, or period of emergency. The last real RIF was at the end of the Cold War.
The reason behind reviving this RIF policy two years ago was that it's not worth the effort and expense to send a soldier to a new unit, where he will remain for just a few months. During the Cold War, this was also done when a soldier returned from a tour of duty overseas, and only had a few months of service left. Until 2004, soldiers were released a little early if they were due to get out in late December (the holiday season).
The army was able to let people go early two years ago because so many new (and high quality) recruits were trying to get in. Letting people out early was good for morale, and there were plenty of capable new recruits to replace the departing troops.
The most important opportunity during these situations is keeping your best people, while you get rid of less capable troops. This is especially important with your career officers and NCOs. But it's bad for morale when you start cutting people loose before they have put in their twenty years (and qualified for a pension). That's where the buyout (partial payment for the lost pension benefit) comes in. The biggest problem is deciding who is worthy of staying. This has always been a tricky process, and past efforts have tended to come up short. This time around, the personnel bureaucrats think they can do a better job. Time will tell.