Why do those people still work there? They should be let go individually to find something more compatible. Mass layoffs are not the way to make that decision.
The result is that good people end up loafing because of lowered morale.
If you are in the rest of the world, batch firing "the bottom 10%" for the stated reason of performance (they normally lie and say it is for a different reason) still requires the exact same amount of effort as doing it when there are actual performance issues.
Properly managed teams deal with actual poor performers, and your bottom 10% employee might be a top 1% employee any other company.
Zuck fired a large number of “underperformers” (obviously if they’re based on performance reviews there is plenty of room for error) and critics said that firing people for that reason destroys their dignity. I see it as giving them an opportunity to actually earn their dignity. I know that the people who are duds in our company have a negative reputation, so is allowing them to keep their job and bad reps really keeping their dignity? To me, that results in a middling (at best) society. It’s a dangerous trait to keep in a culture. Letting people exist in a way that doesn’t allow them to flourish is a very cruel thing to do to them and to the future of humanity.