Yeah, sometimes these are soft-layoffs, but even under that logic it's a bad idea: your best employees are the ones who have the most options outside of your company.

If you do a traditional layoff you get to decide who stays and who goes and have at least the chance to try and retain your top players.

If you do a soft-layoff someone else does the choosing, and the more employable the employee is on the outside the more likely they are to leave.

Just ass-backwards decision-making no matter how one slices it.