Global crisis and large-scale layoffs

Calling the current global financial crisis "abnormal", and admitting that it had impacted the Indian economy, Prime Minister Manmohan Singh Monday asked India Inc to refrain from "knee-jerk" reactions like lay-offs. The prime minister's comments came against the backdrop of a analysis by an apex chamber last week -


but withdrawn later - that seven industries including steel and IT were looking at 25 percent reduction in job cuts over the next 10 days.
Do you think layoff is the proper medicine in coping with the effects of the global crisis?
Should the govt needs to open up its treasury and create avenues for employment and also rehabilitate the employees discharged by industry?