Comment by luke5441

They are laying people off because the cost of financing have gone up. The risk free rate is now almost 5%. For equity financing you'd need to show revenue growth models that allows repayment at that rate plus equity risk premium (which is quite large for new growth companies).

So the CFO makes a model that allows for this and for sufficient ROI they need less people to be more productive. This mechanically forces them to lay people off.

Of course laying people off might actually not improve productivity, but they need this to have chance.