No sane person enjoys making decisions that will cause another pain- especially if there is no blame attached to the person affected.

Tom Peters, and others, have documented, time and again, how loyalty works both ways, and the casual hiring/firing of labor leads to a sick company.

Nevertheless, some businesses are different than others. This is espacially true of construction. Let me use Reno as an example.
We (the town) are just finishing one big project, and have two more in the pipeline. Now, I can't tell you which electrical contractors will get the jobs- but I can tell you who the electricians will be!
A large number of the electricians on the new jobs will be the guys who just worked themselves out of the last one. That's the nature of the biz.

I strongly suspect that there is an informal "pipeline" between contractors, as well. I was once laid off (end of season)....and had just finished cleaning out my truck when another contractor asked if I were available. What made this remarkable was that I had never contacted this guy, he was not running an ad- indeed, he wasn't even in the phone book. A little research revealed that not only was he licensed, but had one of the highest bond limits in the state.
I worked for him, and when that job finished, went straight into another. I haven't been idle since.