In the industrial economy, employers faced fairly homogeneous labor markets. Labor was cheap and interchangeable. When revenues shrunk, employers quickly adjusted by laying off people until demand returned and then rehired the same people or others.
Again, this is no longer feasible. Labor markets are much more fragmented by specific skills, which are often based on intellectual capital. Finding employees with the right knowledge is much harder and expensive, even in down economies. Ask any manager if labor is hard to find and most still answer “not really,” but “smart labor is still really tough to find.”