Why aren't companies seeing how cuts will affect their bottom line when everyone loses their job and can no longer afford to spend money to keep the economy going?

In 2026, we're seeing job cuts and new hire freezes-mostly due to AI implementation within corporations. At some point, the job loss/layoffs are going to be too much to bear. It feels like corporations are ignoring the fact that soon, their market may be affected by their own doing through a chain reaction of smaller businesses failing until the bigger ones are affected.

Example: an large accounting company that does payroll for smaller companies. They implement AI into their workforce and then start laying off most of their workforce due to AI. The employers that are laid off shop at stores that the accounting company does payroll for. Another company lays off people and then another company. All of these people shop at the same store. The store loses revenue and cuts their workforce down, which means they cut their use of the payroll service down. This keeps going with other businesses, etc.

Eventually the payroll company is losing and not gaining due to other businesses losing revenue. Or at least that is how I see it. Am I right? Or should I be looking at it a different way?