Depends on your local labor laws. When I worked for a company based in Washington state layoffs were the best way to fire people. We had layoffs every year, always some good excuse cooked up, but when you examined the list it was really all the folks that in a normal state would have been fired months ago.
“...that in a normal state would have been fired months ago.”
I got laid off from a large company years ago when things got slow. Two years later they asked me back. Then several times afterwards. They also did not like to purchase equipment (they rented it). With people you can lay them off, but millions of dollars worth of gear sitting on a shelf is a problem when things get slow.
I can understand their thinking, but it is short-sighted I think. I used to work for a small company before that and he never did lay anyone off - although there were some tough years for him. But he always made payroll.