[bleah1000]

The problem is that right now everyone is still looking to switch jobs.

If you assume that recessions bring out some really talented engineers looking for jobs, that's not happening yet. A good company strategy would be to stop or slow down hiring, wait for the recession to start in full swing, then restart hiring when the good talent is on the market. At the same time, you could use it to re-evaluate projects. If you've ever worked at a big company, I'm sure you can think of a few projects that should be killed because they are a waste of resources. This gives a big company a chance to remove some poor performing employees. Unfortunately, this will also get rid of good employees too, because of politics and bad managers.

This can be bad for the employees because you aren't sure if your project is going to be cancelled. You are less likely to look at new jobs, so if your current job is really bad you are stuck. This also puts downward pressure on salaries.

I don't know if this is the ethical thing to do, but I think it makes business sense.