> Companies can't use equity as compensation (which is a big lure for talent)

What? Where do you get that? Then I better return all the equity I got.

> and it's extremely hard to fire people

I would say that is hyperbolic, unless you find anything but at-will employment "extremely hard". Small companies (<20?) in Germany, can fire people without reason. I do not know any country (Edit: in the EU), where restructuring is not a valid reason to fire someone (with a severance of 0.5-1.1 monthly salaries per year of employment).

(Edit: But then, I cannot claim to know all the labour laws in the EU)