The morale effect is temporary, the ripple effects of it, in my experience, linger for a very long time. That was my point, those are harder to visualise, quantify, but if you live the day-to-day in R&D/operations you see how people react to it over time.
The analogy used in some layoffs discussions of cutting off a limb is fitting here too, your body can still perform some functions but some skills are harder to perform, some movements aren't possible or are very impaired, etc. You are still alive but you aren't the same anymore, for a company it can create really weird side-effects like some examples I brought up on the previous comment.
The limb analogy is apt, but in my experience I’d change the analogy slightly and make the animal losing a limb a dog. There is a saying that “a dog is really a 3-legged animal born with a spare leg”. A three legged dog in a short time adapts and knowing a few tripod pooches in my life, my experience is they get along just fine, and to them, are not impaired compared to their 4 legged counterparts. I think companies are like that too. Layoffs can create definite temporary operational challenges. However, in organizations I have been in that have experienced layoffs, you just adapt and in time and eventually don’t notice the impairment the layoff caused. It’s just the new normal.
The analogy used in some layoffs discussions of cutting off a limb is fitting here too, your body can still perform some functions but some skills are harder to perform, some movements aren't possible or are very impaired, etc. You are still alive but you aren't the same anymore, for a company it can create really weird side-effects like some examples I brought up on the previous comment.