In my opinion this "hire and fire" policy will have psychological impact on many families. In olden times, when a person join a company they will continue till their retirements. This trend is seen in many American companies also. If we really calculate , the saving by retrenching will be small percentage when compared to the total cost of operation. (Once I was part of these kind of decisions.)
in my opinion the senior management should be made resposible for strategic mistakes.