Why would it "stifle innovation"? Having to run a company sustainably should promote innovation.
It may stifle impractical get-rich-quick strategies and customer scamming, but that's not a bad thing.
It may stifle impractical get-rich-quick strategies and customer scamming, but that's not a bad thing.
The idea that upside potential of an organization's efforts can/should never make it into the workforce and the effort to ensure that it remain this way is extremely sad and corrupting and makes for a world where misaligned incentives and exploitation are much more likely than they 'should' be.
Some of the ways to achieve goal X are via layoffs, some aren't. You cut some possible routes to X, but you add more routes.
Not all routes are equal. Cutting a particular employee might mean that a vital convergent point is no longer possible to enter, meaning all routes now lead to failure.
Some of the optimal routes to X may require that management get paid a fair wage (rather than 40+ times the median), and that they reconfigure the company to enable them to keep all employees - everyone gets hours cut by half-a-day, say.
TL;DR - in short you're committing petitio principii, assuming the best way is layoffs, and thus concluding the best way can't be taken without layoffs.
It's not necessary that the number of actual paths available is reduced by the imposition of "no layoffs", it can actually be increased. It seems counter logical. A restriction can lead to greater innovation that is stimulated by the restriction, there were I'd warrant far more places to get an alcoholic drink under prohibition than prior to its institution.
>you have less options, and therefore less paths to success //
A priori it seems right, but the successful paths aren't randomly distributed; perhaps there is a key employee who leaves under layoffs and the business fails (another business succeeding).
You can apply basic set theory to chaotic and complex psycho-temporal interactions.
But I agree, as I think you surmise, that we can't simplistically mathematically impute the "best" route will be with(|out) layoffs.