Actually they do it in many ways, but it always comes down to the same thing, they have a desired goal of not only the personnel number, but also Officer to enlisted, and than with in each they break it down again.
For example, for Officers it is Flag to Field, Field to Company ratios.
From there they use different methods to cut.
Field they can use 1 of 2 methods.
1. SERB : Selective Early Retirement Board.
~~~ This is sim to a RIF. They target certain yr groups and ranks. Those groups will meet a board and can be selected to be cut. Traditionally this is for O5's and 6's, where they force them into retirement.
It is a precision cut because they can also say certain yr groups in certain career fields are safe.
2. Promotion boards.
~~~ They can, at least for the AF, speed up an O4/5 board while reducing the promotion rate. Passed over 2x and they can force you to retire at 20 on the dot.
The rule is if you have 16 yrs in and are an O4 you can stay until 20, do not make O5 and they can cut you at 20.
Again, it exists to get the Field grade numbers in order for long term strategic planning because they know the ratio needed for company to field.
Once those numbers are in alignment they could move forward with company grade.
Company grade has other options.
1. RIF
2. Have O4 boards held before the 15 yr marker, see O4/05.
3. VSSP
RIFS also can be surgical by going after certain yr groups since the pool is larger. It can also hit certain career fields too.
VSSP is traditionally offered before they ever go for a RIF, but the problem is that if the economy is in the tanks like it is now, many will try to ride it out because at least they have a paycheck, which results in a larger RIF.
There are also other ways to cut which the AF has done in the past few yrs.
1. Release ROTC cadets just months prior to commissioning. They literally say, Goodbye, you will not commission, have a nice life.
2. If select for a rated position and bust at UPT/UNT they can cut them loose. They do not have to convert them into a non-rated AFSC.
This gets rid of officers. Granted in small numbers, but when you are pinching pennies, every penny counts. Especially since if you let them stay they owe at least 4 yrs and that could mess up the long term strategic personnel plan.
The 92 RIF, for the AF was followed by a 93 SERB, and it was preceded by the lowest O4/5 promotion rate in 91. They came back in 94 with another round of low O4 rates, because they didn't RIF enough out of the 85 yr group back in 92. After that in 96 promotion numbers started to rise, pipelines opened up again, and because in 02 they realized they hit too hard the rated world they offered Field grade WSO's bonuses, and 2nd pilot bonuses of 6 figures. This was on top of the amazing pay raises over 10% a yr for yrs for these same yr groups.
Here we are 20 yrs later repeating what happened in 92. I recall in 92 when it happened the grey beards talking about what was happening than happened in the mid 70's after Vietnam. It seems to me that it is cyclical.
That is also why to me some say part of your career will be based on timing. There are many great officers that will be RIF'd and if they were born a few yrs earlier or later they may never have been in this predicament.
The same is true for candidates and scholarships, if you we born a few yrs earlier or later who knows you may have been a shoe in, but because this is your yr group and this is the budget issues now, you are in a more competitive yr group.