Earlier quoted context omitted.
Pretty much my experience. Once one useful person gets laid off, everyone can't help but think they're the next useful person to get laid off. And in small groups it feels personal. So now you're playing CYA instead of taking the good kinds of risks with big payoffs.
In your opinion what hurts morale more? One big round of layoff, or multiple smaller rounds? I've only seen the later happen, and personally I think I'd prefer the first one. If you know that after that large layoff round the rest of the company is safe, I'd venture that might be better for the morale of the remaining employees.
During crises, it hit in waves. That was another kind of drawn out hell: people wondering "am I next?" aren't terribly productive.