Another way of going through it, is to share that you might have to do layoffs, watch as people leave and enough people might leave so you don't have to do layoffs in the end. If enough people don't leave, go ahead with layoff. It's both transparent and honest, no lies required.
Except, weaker performers will stick around for severance and top performers will leave. If sufficient above average performers leave to avoid a layoff you are left with a weaker team. In this instance company doesnt get to chose, which it might want to. Best idea is not to provide reassurance if you cant back it up. In which case, say nothing.
