Some people are not in a position in their life to take any risk of losing their job, and that's perfectly understandable, but those people should not take a job at a startup.
Probably the _best_ advice I got from the entire startup community is, "don't scale without PMF". The saving grace here is that they didn't scale beyond 140 people, so the damage is limited. And they didn't double down on something that would have dropped the whole thing down.
But as a founder, I'd consider it a failure of planning on my part if I had to lay off 50% of my workforce (a failure nobody is immune to, but a failure nonetheless).
If you need that many people to (dis)prove viability.. I don't know. Hard to judge from the outside, though easy to judge in hindsight.