Earlier quoted context omitted.
Safety net is definitely there, but my Dane friends actually told me it’s really bad for small businesses to the point that small businesses won’t hire for desperately needed work because it is impossibly expensive to let anyone go.
I wonder if you have misunderstood your friends. The Danish system is different from other Nordic countries in that dismissal is quite easy from legal point of view (even if for someone running a small company, it may still be psychologically very difficult). The unemployment benefits are good, although the officials monitoring it also force the unemployed to be quite active to find a new job.
I probably have misunderstood his complaints, as you and Tehnix both point out; I'll reach out to him to get the details right...