There are good alternatives to layoffs and the conventional wisdom about some of the alternatives is probably flawed. For instance, the belief that lowering pay or perks will cause the company to lose their best people is commonly touted. But this assumes that everybody is like the CEO-- highly mobile (which is unlikely) and also assumes that other competitive companies are hiring (which, in a recession like this, is also unlikely). Another alternative is to ask employees to take a pay cut or hours-cut so that their co-workers can stay on, perhaps providing some sort of bonus that is cheap for an employer, like company stock. Another alternative that worked in a unionized steel mill in the past was to ask older employees to retire early (giving a small incentive package) so that the younger workers can keep their jobs. The costs to the company of layoffs can be significant, most especially losing workers who are familiar with the business and have the proper training. Some states have adopted furlough programs and 'shared work programs' that give incentives to employers to furlough their employees rather than laying them off. The article also gives some history of different layoff alternatives, ending with gently suggesting that government programs (spending) can assist the private sector in avoiding layoffs.
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