IMO its both ends. Overhiring and layoffs are both indicators that managers need a strategy change. Unfortunately Wall Street boys don't understand that employee productivity is directly correlated with stability. People don't actively try to improve how they work if they expect to be switching a job or getting laid off. You need employees to build a sort of nest where they want to be most productive in. Both overhiring and laying off is extremely destructive to the company because you increase volatility in social dynamics.