There are good times and bad times. If my company is not with me during bad times, I wouldn't want to work with them.
YC's reputation took a big hit in my head.
I'm not advocating for reshuffling your workforce for very short-term needs, but if the longer-term goals change, the team often has to as well.
I believe the employees laid off would be perfectly capable to assist in early-stage seed rounds as well. That way YC could have vetted more projects and invested more.
Imagine that the people laid off were tasked to find and seed environment friendly startups etc. Deep work requires a stable paycheck and job safety. If YC really wanted to make things better, they'd know better.
With these lay-offs, I won't be surprised if all the remaining employees would be yes-sayers lacking any individual incentive.
This is true of every big tech company doing layoffs. They can all easily afford to keep everyone. They choose not because capitalism has no room for humanity.