Per the Harvard Business Review:
“Companies that conduct layoffs underperform for nearly three years longer those that do not. The reasons are in the well-researched hidden costs of layoffs. Employees who survive the layoff may struggle with anxiety, insecurity, low morale, sadness, and survivor guilt, which lead to disengagement and hinder job performance. Research shows show that anxiety about job security, grief for coworkers who were let go, and overwork can reduce innovation. Quality may decline as employees focus on improving productivity to keep their jobs. Managing talent becomes more difficult as existing staff resign. Reputational damage may make it harder to attract high-quality new hires.”
https://hbr.org/2022/12/what-companies-still-get-wrong-about-layoffs