Yeah, it seems to obvious to me that you should never say something like "this could affect your continued employment," even if it's true! That means that all of the staff are worried about their jobs, even ones you have no plans to lay off at all. Such a shitty thing to say, causing unnecessary stress to everyone. It totally feels like a threat. I've been through a similar (but honestly worse) mismanagement scenario at work, and I still 100% trust the company less, even though I'm still here 2 years later.