Isn't it possible to just not give people severance packages?

Somewhere between 85% and 90% of all countries have some sort of mandated severance pay in the event of a layoff.

A small percentage of countries also mandate severance even if the employee is fired (with cause).

Depends what sort of contract they have (and/or how much perceived leverage they have - firing high-income workers who have a public platform can make for messy PR)

It is likely too late for many existing contracts with packages built-in, which probably also overlap with the longest-working (and thus most expensive) engineers.