It's okay to feel bad for people who lose their jobs. But business cycles are important for a healthy economy. Unsustainable ventures need to die or be pruned at some point if you want to generate lasting prosperity. Whether this specific instance actually serves to create a more productive and more dynamic company remains to be seen, and it sucks for the people affected, but if they're skilled and useful – as every person should always strive to be – they'll be fine.
It sounds heartless, but it's the reality.