Discussion on question by Qiulang: Will lay off people get any "positive" effect to the business b/c the remaining ones may think if I don't work harder I may be the next?

Can you add a China tag please? Layoffs have different rules in different countries, for example, where I live, the boss does not get to pick who they want gone if they invoke a layoff. If they want to pick based on performance, they need to actually fire people. So the premise of your question might not be valid in other countries.