I have worked or consulted for a few that went too far the other way and it wasn't that great either. If the company is too loyal, then it can create a corrosive environment because good employees sometimes leave for reasons unrelated to the employee-business relationship, family, retirement, health, etc. The bad ones seem to never leave, though.

Honestly, I would rather work somewhere that is willing to get rid of useless and/or corrosive employees than somewhere that refuses to do so out of misguided loyalty.