The best people are the least likely to come back, and going through all of that will surely impact productivity.

Just two days ago at work a call of 15+ people spent a non-trivial amount of time recounting the scars of colleagues being laid off, or they themselves having to sign severance papers, only to be saved in the final hours. These events happened 10-15 years ago and they still cost the company time a decade later, not to mention that trust that erodes with these events.

If companies want people to focus on work, those people need to feel secure in their jobs. Laying them off and hiring them back is not job security. It’s a signal that management has no idea what they’re doing. Why would these people follow the leadership of those who can’t even solve the issue of staffing without making a mess of it?

It’s also bad when seemingly competent employees are laid off while incompetent ones stick around. It sends a signal that it doesn’t matter what you do, so why try.