When executing layoffs like this, the hardest thing _for the company_ is to make sure that the negativity from laying people off doesn't destroy the company completely.

Ben Horowitz has some interesting insights on this in this blog article: http://www.bhorowitz.com/the_right_way_to_lay_people_off

I think this is essentially just a better way to make sure that the people 42 floors really wanted to keep knew personally that they were important to the future of the company.

And reading the article again, all they told people is that they were staying, and what was going to happen the following day. They didn't say that the people staying were told who was going to actually get let go.

I think in the context of a pivot away from a failing business model, this move seems smart, not wrong. People affected by the layoffs are being let go - their happiness, in some sense, is definitely going to be impacted by the layoffs. But for those people staying, it seems like they really needed to go through some stuff, and I'm sure they all appreciated the heads up.