I don't know if there are precise definitions, but I've always used (in the US):

* Fired with cause - gross reason: sexual harassment, illegal activities, etc.

* Fired - incompetence, laziness, other ineptitude related specifically to the employee, but nothing illegal

* Laid off - financial reasons or business direction reasons for the company. (Some people who are borderline performers get swept up into lay offs, which helps the employee save face.)

In the latter 2 cases, people generally get severance arrangements. In the last case, people are generally eligible for re-hire should conditions or direction change.

You are wrong, but in the right general direction. "Laid off" means involuntarily terminated because of a reduction-in-force / elimination of positions. "Fired" means involuntarily terminated for any other reason. Except in the case of positions with special protections, either contractual (personal or union) or legal protections of the type that apply to career civil service positions, you cannot assume firing is about either misconduct or performance; it can just be because the boss decided his nephew needed a job.

And "let go" subsumes all forms of involuntary termination, both layoff and firing.

> Fired means they were laid off for some gross reason

You're correct in spirit, but no one ever uses the phrase "laid off" to mean "fired". "Laid off" usually means you were let go because of say, financial problems in the company, no need for your position, etc. "Fired" implies cause.

> Please correct me if I'm wrong.

You're right. "laid off" would tend to mean "made redundant".