Is it? You already laid off a large percentage of staff. Your product teams will have seen the data showing cratering revenue. Your top engineers are almost certainly already looking for new jobs anyways. You know you are going to have to make this move no matter what. Anyone with a brain knows that the status quo is unsustainable whether you say the quiet part out loud or not.

Better to give people a heads up so they can start getting their resumes in order, hitting up their networks, etc. rather than telling a blatant lie.