1620s, vorloffe, from Dutch verlof, literally "permission," from Middle Dutch ver- "completely, for" + laf, lof "permission," from Proto-Germanic *laubo- (see leave (v.)). The -gh spelling predominated from 1770s and represents the "f" that had been pronounced at the end of the word but disappeared fairly soon thereafter in English.
1783, "grant leave of absence" (to a soldier), from furlough (n.). Of employees, "lay off or suspend temporarily," by 1940. Related: Furloughed; furloughing.
1. This could mean a massive furlough of government workers.