401K

The employer absolutely has to follow the plan documents as well as IRS regs. This document outlines whether or not loans can be made. You should be able to take the money out if you are willing to accept the early withdrawal penalty and you're fully vested.

Aside from that there should be some investment choices within the plan that you can move the money from riskier to safer funds. Some plans will only let you move so much per month or quarter. You can also reduce your current contributions to zero % or redirect those funds into a safer investment allocation.

Even if you quit or get fired, taking an early distribution without rolling into some other 401k plan or IRA will have stiff tax consequences.

You have every right and you should remove your 401k, especially if you are losing money. Most employers recommend you transfer your 401k if going to another company. You CANNOT GET FIRED if you choose to withdraw your money from your 401k. It's your money.

I am sorry to hear about this. I am by no means an expert but I would try 2 things: 1. stop making contributions if possible; and 2. try to transfer from your current plan that is losing value rapidly to a more stable plan within your 401 if possible. Funds based in bonds if possible. Good luck. Everyone I talk to is losing money.

Some companies do have guidelines that they have to follow in regards to getting out of their 401k. At my company, we couldn't get out unless we left the company (it's written in the policy), but fortunately for us, our boss is taking us all out of it because no one has contributed any money to their 401k and he fears he will be top-heavy and will be penalized. He also doesn't like all the money his company pays quarterly to be in this 401k. So he is closing it, we all get our money and can either put it in our own IRA or cash out with penalties.
I feel your pain. I was watching my money dwindle down and I was hoping he'd get us out of it before I lost everything. Not to mention, once he put our Christmas bonus in our 401k instead of giving us a check...I guess you could say that went bye bye! We were really upset when that happened cause you can't really buy any gifts with that...can ya? HA!