How did the shrinking economy lead to increased layoffs of workers in The Great Depression?

Since the economy shrunk, business owners didn't have enough money to pay their workers, and since they didn't sell much, they didn't need workers. Since many people didn't have a job because of the layoffs, they didn't have money to go buy things. It became a cycle.

The shrinking of the economy lowered the profit after selling goods and it wouldn't make sense not to lay off workers