It's also herd psychology (and greed) on the part of investors. If a company does layoffs its competitors' investors go "if they can survive and increase profit

It's also herd psychology (and greed) on the part of investors. If a company does layoffs its competitors' investors go "if they can survive and increase profits after a 10% layoff why can't we?" And executives can't really answer this because they know they can lay a lot of people off without immediate impact to the business. It's no secret that every tech company is way overstaffed.