It's mad that this even needs said. A company's aim should be to be sustainable and profitable, not to be a receptacle for capital. Some companies need external capital to get to that point, particularly hardware or those operating in slow-adopting markets. If you don't need it, don't take it.
A couple of lifetimes ago, a business mentor of mine taught me a truth that has served me very well. There is a correct amount of money for starting a business, and it's probably less than you think it is. Too much money in a startup tends to gum up the works and can kill a business just as dead as not having enough. If you have too much money, you're not only going to blow it on things that don't matter, but when yo…
There is a huge cost when you let go of people who would otherwise be kept on payroll if you could continue to pay them. You will get fewer internal referrals to new hires and remaining staff become less engaged in their work. There is additional long lasting damage to your staff as a whole who survived the layoff this time. The culture at the company shifts and never fully recovers.
I don’t think businesses always fully appreciate the long term cost and damage layoffs do to small and medium sized companies, but see headcount reduction as a simple way to reduce its own costs.