[wpietri]

I suspect it's less about depressing worker compensation than increasing managerial compensation. Average CEO tenure is quite short these days, so the incentive is for execs to maximize short-term gains. Layoffs fit in with what I think of as "market sadism". In economically troubled times, CEOs counter fear of weakness by looking tough. (Tough on other people, of course, never themselves.) That lifts the stock price, putting money in their pockets, and hopefully giving them longer at the trough.