You should trust that your counterparty will abide by the written terms of the contract. Believing anything further is folly.
It's just business.
What I don't get is how not many founders believe that loyalty is a two-way street - you should expect to be as loyal to your employees as you expect them to be to your startup.
There's a whole ethics discussion to be had here (is it better to fire 40% and save 60%, or end up closing shop and 100% losing their jobs), but "taking advantage of the misery of others and hiring desperate workers" just sounds like you're not understanding how damn hard it is to be in the CEO seat.
And still, your duty as CEO, starting with your duty to your teammates, is to maximize the chances that most people keep their job. The best way to do that is to build a healthy and enduring business & economics. At least as long as people still want to be paid with $$. And this is no bad joke: the pioneers of any industry, like were those joining tech startups in the 70s, were in it for the cause, the dream, the revenge, etc. Today this is not the case anymore: tech is a 'job' for most. Which is absolutely fine. A victory actually: it means tech has become a 'normal' industry.
Unfortunately, the recent cycle was not about 'health'. so as in all excesses, the body needs to rebalance.
> Labor market is in your favor: renegotiate compensations, starting with the B players. Whoever leaves will not be hard to replace. [...] Layoffs are disgusting for everybody. Multiple waves are not OK. Be courageous and sensible: any additional wave further depresses your team and worries your customers. And, at least a few thousands of the 175,000 laid off are surely better and cheaper than your bottom 20% performers. Probably more hungry too.
> Founders who managed to be relatively less diluted thanks to recent sky-high valuations: carve-out a portion of your own equity to compensate your pivotal talents or new hires
If you just listened to the savage management consultant type, and laid off everyone you possibly could, and then hope to take advantage of the misery of others, to hire more desperate replacement workers...
Those "pivotal" people with experience are going to see there's no loyalty nor trust in the company. Which doesn't bode well for a startup.
Uh, yeah, rather than more equity, cash is good. And, uh, let's switch to weekly payroll, given slippery slopes and the foot-dragging that the management consultant advised about payables to vendors.