Surely. (Too many) firings have a negative impact on morale. Especially if not done once. I think the point being made though is that it is very uncomfortable to fire people, so managers tend to avoid it, even if it's the right thing to do.
Ive been at a company with multiple rounds of small layoffs. Each time they didn’t want to cut too deep or thought ‘maybe this will be enough’. It wasn’t.
It was a total moral DISASTER.
If you need to cut, cut. But multiple layoffs will kill you.
