If the company isn't doing well everyone in senior management should also get a haircut. Bonus cancelled, pay reduced, etc. As per the CEO - "Not meeting deadlines will not be acceptable". Well, dude, what about your own deadlines and milestones? He drove the company into the ground, and so should also shoulder some of the responsibility.
Anyway, I hope the CEO feels Better
Probably the right thing would have been smaller lay offs a while ago, they must have seen this coming.
It's rarely a surprise in my experience (eg: new owners/investors are sniffing around for months). Announcement of the acquisition/investment is often made, mentioning that certain business units will need to be 'optimized' or some other vague term.
Preferably followed up with various smaller meetings, but those aren't legally required everywhere.