If you are faced with a downsizing situation, one of the HR Management tools to consider is a program where people voluntarily leave the organization.  With a voluntary program you are less likely to become involved in legal issues since the person (people) leaving chose to do so. Employee morale tends to stay higher with these types of programs as well.  In order for a program like this to be successful, there should be a severance offered.  If there is severance, you should ALWAYS have the person sign a release of claim.  Be sure to involve a Human Resources Consultant or seek legal advice before drawing up an agreement.  There are certain element that must be included. 

There are some drawbacks to implementing a voluntary program.  Sometimes a person that is valuable to the organization will agree to leave.  You also need to be careful that your program in not discriminatory - that it targets a particular group of employees. Be sure that you have made a decision how to handle the situation if more volunteer than you need and more importantly, what you will do if less volunteer than what you need.