Not automatically. It breaks continuity for that period, but a genuine continuous twelve-month stretch either before the layoff or after rehire can still satisfy the requirement if it is properly documented.
Find a genuine continuous year rather than combining two partial ones
L-1A status turns on one continuous year of qualifying full-time employment within the three years before filing, and a five-month layoff interrupts that continuity for the period the executive was not employed. This does not automatically disqualify the case, but it does mean the petition cannot treat the pre-layoff and post-layoff periods as one combined year.
Instead, the employer needs to identify whether either segment on its own reaches a full continuous twelve months: if the executive worked a full year before the layoff began, that period may satisfy the requirement on its own; if not, the period after rehire needs to reach a full year before the petition is filed. Filing before either segment independently reaches twelve continuous months risks a denial for failing the continuity requirement, so the timeline should be mapped out carefully against the actual employment dates before a filing date is chosen.