I'm not sure what is better for the employees but often middle managers tend to keep their staff until forced by top management to let someone go.
As for "destroying" lives, I suggest we don't let ourselves get carried away by this. A job is a job; a means to make money. There are other ways to make money, including by taking another job or by starting your own company, which is very realistic for former Tesla engineers.
Just like you are not obliged to buy a Tesla model 3 although you might have bought a Tesla model S beforehand, Tesla is not obliged to buy your services as employees forever and ever. A job is not till death do us part.
As for comment about "arbitrarily" firing people; there is nothing that supports that Tesla did that. Why would they fire people arbitrarily? They are scaling up. The last thing they would do is to fire for the sake of it.