Did you guys miss the point? In August, the employees were notified they would be laid off on Oct 1. In other words, the company was giving them a certain amount of time to leave voluntarily.
Presumably, the person wouldn't work very hard during that time he was still being paid? Yes and no.
Being a defense contractor where there can be a distinct difference between the new contract and the old contract, even when renewed, I've seen a few situations where people knew their job was gone as of some date shortly in the future. Usually, the person still takes care of their normal daily duties, but obviously no one will be assigning them new projects to work on and obviously the person will have more and more time during the day to focus on their job search activities (usually, it's frowned upon to spend your work day sending out resumes, etc, but that attitude becomes rather relaxed for employees that are about to get laid off).
That only happens in some companies, by the way. Many companies won't give their employees any warning about an upcoming layoff. In quite a few companies, you find out you're leaving the day your job ends and someone then escorts you to empty your desk (just to make sure you don't steal the paper clips, etc) and then escorts you out the door.
Management in my field is probably slightly more respectful and compassionate of employees because it's not a huge field and some of those laid off employees are likely to work for the same supervisors, perhaps in a completely different company, somewhere down the road. Usually, the company holding a contract changes, but the workers tend to be the same people being hired for the same job over and over.