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It's probably better for the company, cash-flow wise, to lay employees off after their vesting cliff. Some of them might exercise their options, using the severance you just paid them, reducing your total expenses. You can always increase the option pool in the next round (if there is one.)

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These days*, the equity component of most** offers takes the form of RSUs, not options, i.e. when the equity vests, you just get stock (public or private).

*, ** For some definition of "these days" and "most", based on first-hand factual knowledge of the FAANGs (except Netflix with their special approach to comp), various "unicorns", and a long list of US-based companies modeling themselves on and/or aspiring to be the next FAANGs and unicorns.

Yes, I realize this. I was mainly talking about the earlier stage startups where you are offered traditional stock options, not RSUs.

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