Most managers/entrepreneurs I know absolutely
hate firing & laying off people. It's their complete least favorite part of the job.
The difference is that managers are typically under more constraints than engineers, and then entrepreneurs are under both more constraints and more uncertainty than managers. As an engineer, your job is to make the machines do what your boss wants them to do. You may have many technical constraints, but you basically have only one human constraint: what your boss is asking for.
As a manager, your job is to keep the team functioning and keep your boss happy. If your boss says that your budget has been cut by 40%, there's nothing you can do about it, you've gotta let 40% of your people go even if you really like them and they've shown you nothing but loyalty. If you've got a brilliant technical contributor but he's socially abrasive and half your team's threatening to quit if you don't get rid of him, you can fire him or you can lose half your team.
As an entrepreneur, your job is to a.) identify why the company should exist b.) hire the right people and c.) make sure that there's always enough cash in the bank. And if you have to lay people off, it means you fucked up. But you do all three of these things under conditions of extreme uncertainty. Maybe the technical rock star that shined brightly in the coding interviews is a douchebag to women, and you have to fire him so that you don't lose every woman on your team. Maybe you hired in anticipation of growth, so that you don't burn out people, but then the market for your product turned out to be much smaller than you thought. Maybe you hit a recession and your whole sector contracts.
Remember that entrepreneurs are ultimately responsible to customers, and customers show zero loyalty. If a better product comes out, or they hit on hard times, or they change their line of business, they have no obligation to keep paying for your product.
Trust and loyalty absolutely play a big role in the software industry today, but business is a lot more complex than it seems when you come out of college, and you learn quickly that you can't always do what you want.