Machiavellian startups

(I am ex-Microsoft, currently at a startup having worked here for a month) I always thought of startups as idealistic places where someone has a good idea, convinces investors and coders to join him, builds it, ships, and either grows, gets bought out, or fails. Good old fashioned honest capitalism. We're a small team of 18 people: 5 "backend" engs, 2 frontend/mobile engs, CEO, CTO, a PM, and the rest content and marketing. Today our CEO announced that "the idea" - the concept the company was seemingly founded on, and named after, is on hold (exec-talk for canned) and announced the departure of at least 3 people (2 content folks, 1 marketing) - this wasn't a Yahoo-style surprise firing: the CEO held meetings with them in earlier in the week, so it was just a solemn moment. There was the usual empty "we'll do anything to help you guys out" platitudes. I note all these people were paid hourly too, and not particularly well either based on things I overheard about their living situations. So far, so brutal. It's a given that startup-life is risky both for those at the top and bottom. The business is being made more lean to focus on engineering; I hope my job is safe, especially as we're hiring even more engineers he says, but he also alluded to getting rid of people too. Eep. The "new" business itself isn't anything inherently evil so I'm happy to continue working here, just unnerved at seeing "At-will employment" being exercised right in front of my eyes. Ho-hum.