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What if this is not a mistake? If you have 5 people and 10 projects, you hire 5 more to meet the need. If 4 projects go away, you fire 4 people as some would have nothing to do.

Where is the mistake?

I’m not saying it is always like this and the scenarios above is simplified to illustrate a point. However, it would be silly to assume all companies always grow in headcount, and any downsizing is the CEO somehow messing up.

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Just spitballing here, maybe the lesson is to not make business plans assuming "stonks always go up" and also take into account a recession.

You can't, your business strategy has to reflect stonks go up. If your funders are all thinking like stonks go up and you try to build a sustainable YoY profit generating business, you aren't producing a risk reward curve attractive in that environment, and thus won't get funded.

Maybe funders need to stop expecting interest rates would stay low forever.

What if the business plan reads something like this: When stonks go up, we hire, and when stonks go down, we fire. That does not seem stupid.

It still sucks to be fired. But the alternative world where we avoided firing at all costs, would mean not as many people getting hired when stonks go up.

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