I can tell you've never run a company. You're likely to lose your best employees because they know what they are worth and are unlikely to live with a pay cut

I can tell you've never run a company. You're likely to lose your best employees because they know what they are worth and are unlikely to live with a pay cut because working with you is no more special than working for someone else. Losing great employees is not where you want to save money. It's extremely expensive to find, hire, and train people, and once you lose them you also lose their domain knowledge within your company. If you lose the engineer that built the product that makes you money, good luck modifying or fixing any issues with it in a short amount of time. Layoffs are about survival, doing what you suggest is a sure fire way to kill your company.