why don't companies do pay cuts instead of lay offs?

Why would a demoralised employee work? Better to have none than have some.

You can upset 10 employees by letting them go or upset 100 by pay cuts.

because pay cuts are a big demotivator. People will crib and complain and reduce productivity. There wont be any gratitude. instead , fire a few, the rest will work harder trying to get into the good books of the manager. You can then reduce pay, they wlll work even harder.

People will stop giving output, also when people are fired support staff is also reduced like line HR, office boys IT department . In my prev org, they tried this with varying salary cuts ranging from 10% to 50%, one by one people left including star performers

Pay cut for really under-performers is ok but if they do for all then it will be bad