Loss of money? Layoffs normally have severance packages that are paid out to the employee - this can be seen as the company taking a monetary hit - though not proportional like you said. But what's the alternative here? 5x/10x'ing the severance package? I feel like that would make the job market even rougher as companies would be even more conservative with who and how much they hire.
Mental trauma? I mentioned it in another comment, but the employees after a layoff normally do have an increased fear of future layoffs which impact morale which would result in lower productivity.
Loss of residence / food? I'm coming up blank here.