This happened to me. Was the sole developer on a certain service. Other engineers would use the service at the company, but no one else really wanted to get into it and work on it.

Was working on fixing an issue one morning, got roped into a meeting, and escorted from the building. Next week, saw an email from a coworker asking how to do something with the service. Told him, politely (don't burn bridges) that I didn't work there anymore and wasn't interested in helping that company without payment. Yeah, it might be thought of that I hung him out to dry, but that wasn't my intent. I just won't work for free, particularly when I was booted without much chance to get my affairs sorted

This happens all the time and the downstream effects of hazardous layoffs are often not seen or felt until Jim the resident container expert isn't around to restart the critical containers that all of your other services need, so you start losing a lot of money and time as John the replacement scrambles to figure out how the system works and what to do.

Or they get hired back as a contractor for 3x-4x the hourly wage as you mentioned.

And then more good people leave too, as they're more willing to accept other offers.