[cbanek]

Well I think in good times, it's trickier to do a layoff. Like you said, it can appear like it's related to financial pressure. In good times, if you do a layoff, investors/shareholders will worry that you are doing it due to financial pressure or limited opportunities to use those employees to make money (growth). The way to say it isn't about financial pressure is to take the PR hit and say these are low performers. Which kind of implies you messed up by hiring them. So either way, it hurts you in good times.

Now in bad times, it's considered "prudent," because everyone is under financial pressure. Laying off people preemptively wins in both ways in that in can look like you're eliminating financial pressure when everyone is worried about it (as opposed to the good times, where you will be singled out), as well as being able to get rid of the lowest performers and reducing pay of everyone else while avoiding bad PR, and even being considered good because you're still employing the rest. As long as the business remains solvent it's a win-win for the company.

Not saying this is good or bad for the economy or the employees, but just reflecting on some of the game theory of this.

[im_down_w_otp]

Laying off in good times means you were bad at hiring in the first place. Laying off in the bad times means the bad things weren't your fault. It's a very good way to not have to convey to the market, your investors, your supervisors, and/or yourself that you may not be very good at hiring while also giving yourself another go at it (hopefully with better results, though probably not, unfortunately).

[arachnids]

I think everyone is bad at hiring because hiring is hard. The problem is that companies are also bad at letting low performers go because we're human beings and public perception, conflict avoidance and empathy for co-workers influence our decisions

[wutbrodo]

I don't know what world you live in where any company (beyond a tiny, tiny scale) isn't "bad at hiring". Especially not using the ludicrous bar of "never hiring low performers"