I would be cautious but not overly concerned. The research consistently shows that layoffs are a negative for the company and should be a last-ditch effort to save the company, but it is likely a sign of a downward spiral. But being profitable already means that the company is at an important crossroads. It either grows and raises resume or it falters.

Is this your company's effort to avoid layoffs? If so I might appreciate that they have thought for themselves and are being proactive to avoid layoffs. This could be a sign of good leadership.

And I prefer to keep my colleagues instead of earning a couple more bucks, but that's just me. (Besides, it would likely me more work for me, too!)

For you, you'll have to decide if the company's future is worth it for your pocket book. You may indeed find more pay somewhere else. When a pay cut and freeze happened to me during the pandemic, the payoff was indeed worth it later because the leadership looked out for us. This isn't especially common though.