Simply replace the unfilled areas such as "" and "[date]" with your information.
I am sorry to inform you that your position at [name or organization] will be terminated as of [date]. We are downsizing our organization and we regret having to let you go.
We have been extremely happy with your performance over the past [#] [months/years] that you have worked for us. This termination does not reflect on your job record and performance here at [name or organization].
Given your track record with us and your skills and proven abilities, I know that you'll have no problem finding new employment. If you wish I would be more than happy to write you a recommendation letter.