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U.S. school districts are facing unprecedented financial cuts due to weakened local and state tax-bases combined with the cessation of temporary federal aid. Increasingly, districts are laying off teachers in order to balance their budgets. The limited evidence-based research on teacher layoffs that exists focuses almost exclusively on policies that prioritize seniority. In this paper, I examine the implementation and consequences of a flexible reduction-in-force policy in a large urban school district. I find that the district was able to identify and dismiss lower performing teachers. I also estimate that teacher layoffs negatively affect student achievement in the following year. These findings document the potential of flexible layoff policies and highlight the importance of mitigating the negative effects of reductions-in-force.