You can't make unicorns where layoffs are "forbidden"
That's life, in downturn times startups need to be able to layoff
The pandemic is harsh for every company, and startups make no exceptions. Companies that are designed to fast must also be allowed to let people go quickly. Tech startup layoffs have reached 32,000 since the beginning of this crisis. Check this out on Layoffs tracker!
It's sad because those layoffs are families, but no redundancy fund or social safety net can avoid that in the medium term. When governments decide for companies, it's wrong—for the business.
People that are let go probably won't be the same that companies will need when markets rise again. Being forced to retain the wrong persons in your teams, it's a weakness that your competitors might not have—especially in a global market.
That's always true, but it's especially true for companies backed by venture funds.
That's another reason why Silicon Valley investors don’t like to invest in countries with such a regulation.