Tough times call for tough methods. Every benevolent dictator understands that.
Few airlines in the current climate can afford strict implementation of last-in first-out and all the attendant re-training that would be involved with a major fleet reduction. A management acceding to that demand will only accelerate bankruptcy.
The compromise, for pilots at least, is job share. If operations are cut by two thirds, put everyone on a two day week for one third salary. That is actually a slight increase in productivity in that it is the equivalent to each full time pilot flying a six day week. This slight productivity increase is is roughly offset by the cost of keeping excess pilots in simulator check etc. To further offset the inefficiencies of keeping excess pilots in check (but only if not covered by productivity gains) annual leave would not accrue while job sharing.
Pilots at the top of the seniority list would not feel as much pain as those at the bottom - in fact most senior captains should survive on a third salary anyway. It may mean taking the kids out of private school and trading the his & hers matching Beemers for a Corolla. But hey, a car is a car and ordinary public schools are adequate for learning basic basket weaving (which is all our education system is fit for anyway).
Such a scheme would be far more tough on those at the bottom, but at least they would retain a part time job with 5 days a week available to stack those supermarket shelves - which is their cross to bear. If they do have an expensive car on the never-never, let the financier repossess it. A pushbike will provide all the exercise they once paid for at the gym.
How to deal with those not prepared to job share? Sack the mean spirited, selfish bastards.
Upside to this dastardly scheme is nearly all pilots could maintain proficiency for when some recovery occurs. Those who get too far out of recency will find it very difficult to get back in the game.
If all this sounds like I am not sympathetic, not so. Merely pointing out the way I would do it if I was that benevolent dictator. Be thankful I am not!