Timing is the most important thing in this process. You want to make sure you treat the people being layed off with dignity and respect. If your staff sees you doing a bad job there you will lose credibility. Once these people know they are being layed off(this should be done in one day) you should bring the remaining people together and describe why you did what you had to do and that you were sorry but it was the only way you could keep a viable business.