1) If a company needs to downsize but believes that their older employees have accumulated so large an amount of human capital that getting rid of the older workers would be more painful that getting rid of new people they are less invested in (this is all relative as the company would need to weigh this against future losses from having invested little into the new younger group of workers)

2) Layoffs can be much more discriminatory that voluntary severence/early retirement packages. If the company offers a voluntary severence package they would offer it to everyone- and it is likely that their best workers would accept the severance- those that are confident their skills are marketable to other companies. Their worst workers would reject the package if they KNOW their value is minimal and they would not be hired elsewhere.

in addition, the firm would need to weigh all of this against the negative publicity and worker morale problems that come from layoffs.