You can spin it however you want, come up with some great arguments, but if the CEO decided to fire people, I don't think he takes that decision lightly so when he/she presents that decision you can count that it really is the last option he has.
It all comes down to trust. Trust your CEO that he has no other choice, maybe explore alternatives. But if he is a really good CEO, even if you fight it and argue for it, you'll wind up at the same conclusion he did. In fact, 9/10 you'll wind up at the same conclusion he did. Remember, it's his job to convince and lead people so he's probably better than you at that.
It's the CEO's job to be able to weigh different kinds of risks and make a decision. So bubbling up your concerns is the correct answer.
Intra-team relationships are super important, as are the degrees to which the team members have arrived at the company, how long they have known each other, whether they knew each other prior to their arrival and so on. Before you know it you have a mass walk-out on your hands with those that have options leaving first.
The best way to deal with this is to do it very gradually and taking great care to not inadvertently wreck the core structure of the tech department.
If it's the best reply they can come up with, they're not competent enough for the position.