I would expect that in this case it would go even beyond that. In many European countries there are protections against unjustified layoffs. I could imagine the law and judges in various countries to be rather unsympathetic towards "yeah we just hired you but we're now laying off 80% of staff because fuck you that's why".
Especially in cases where there is any evidence that the layoffs were planned before the contract was signed - wouldn't that be problematic even in the US?
In some European countries protection is even stronger. If a position becomes unnecessary, you first have to try to find another position within a company that requires a comparable level of education. You can only fire people for grave negligence or for violating rules, or lay them off e.g. if your company has to in order to survive.
From what I have heard (but IANAL), Germany has weaker protections (which is relevant here). Also, typically people sign away their rights, trading them for a good payout + a good recommendation for a next job.
Germany has a 6 month probation period for new hires in which both sides can terminate the contract with 2 week notice. After that, it is one month, two months after 3 years going up to 7 months after 20 years.
The trick I see the most is actually hiring consultants. They're basically like employees but it's not you who hire them, it's the consultancy company. So you can have them working for your startup in short contracts of a few months (which can be prolongued and without much trouble even terminated early). But normally, they also have clauses against trying to hire the consultants directly, so if they are really good and write a good chunk of your stuff, when they leave you might be left in a bit of trouble.
Especially in cases where there is any evidence that the layoffs were planned before the contract was signed - wouldn't that be problematic even in the US?