I can see how it's a scare tactic in general. You try and scare the unproductive people into being more productive. And you try and scare the productive peopl

I can see how it's a scare tactic in general. You try and scare the unproductive people into being more productive. And you try and scare the productive people into staying by implying that the market may not be all that hot outside. Or whatever. Scare tactics don't exactly rely on rational thinking. Also, you are reclaiming the work being done by the fired. That work can be reassigned to the people not fired. And hopefully, those people will be too busy to quit.