Nope LauraNorder. I have seen both small and larger businesses working in this way. If larger, the "slack" goes both up and down in the comapany, not necessarily to the owner/CEO. It is standard corporate economics. I'm not saying it is the only thing larger companies will do, they will also delay purchases, cut waste and all the things you would expect.
Your suggestion could mean that you lose two/three hands-on people producing the companies product for one manager/director. Losing that job may not be great for the company but it is probably more possible than your suggestion. Perhaps all at "worker level" should go and all management remain? The issue I have with your thinking is that you are still trying to prove those who lose their jobs must be less productive and I think this is an odd view of redundancy and of your fellow human beings.
Businesses have problems, especially coming out of the pandemic, but also at other times, these are to do with the economics, of the business or of the country, sometimes of poor management sometimes social changes but they are not all driven to the wall because of poor workers.
But then, many on here simply cannot see this to be the case and must blame people for the loss of their job. Perhaps because, if they don't there is always the chance it could happen to them and theirs? I don't know, but it is a callous way of thinking about others and generally untrue.