Ongoing Layoffs in the Indian IT sector shows how money(read dollar value) controls man, as people were found incompetent to control money!
Layoff may be the only option in USA, but is it required in India. In US, average annual pay rise is about 2~3%. So the chances of a person sticking to a company, even when he doesn't get a pay rise is more. But in India average pay rise is around ~30%. So if you do not give a pay hike, dudes leave the company. In such a situation, not giving hike to let those employees resign themselves might save $ for the company as well as give the dude time to get a job! Also attrition is more in India. So stopping the hiring will also work!
My personal opinion(though I was never laid-off, hitherto :)), is that lay-off in India is always a loss for the company. Stop hiring/giving hike should work! I know a company which did lay-off and a year later spent huge huge $$$ to recruit sub-standard people. Total loss :(
I even doubt that using attrition and stopping pay-hike means no job for the HR dept and managers. So they will look useless to the company. But layoffs mean more work for them! No surprise, it is natural for people to decide which favors them.