The key insight is that every unemployed worker who wants to work is a potential profit opportunity for an entrepreneur who discovers ways of employing him. Even workers who have a hard time finding new work are potential profit opportunities. They are likely to be available at modest levels of compensation, making it cost-effective to hire and train them. And when they are trained they acquire additional bargaining power with their employers and with potential new employers. This is why, in a market-based economy, layoffs do not usually result in a growing number of unemployed people and falling average rates of compensation.
Unemployment is like a pipeline.
There are always people entering the pipeline, but there are always people exiting it too. Even if the number of people in the pipeline at any moment were always the same, the faces on those people would be constantly changing. Entrepreneurs, like all people, make mistakes. Some entrepreneurs think they perceive profit opportunities and hire additional labor to try to grasp those opportunities. When losses instead of profits emerge, they have to pass out layoff notices.