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quit-or-resign

We are a federally regulated company. We have an employee who was promoted in position and pay around two years ago. The employee now does not want to do the job, and instead wants a junior position, which we feel is not enough to constitute a full time position.  She has twenty years with the company.  My question is, if we cannot create a new position for her has she resigned? Or would the company owe her all notice and severance?