There are some nuances to the terminology. Companies avoid the term "layoff" because it implies that people might be re-hired once the slowdown is over. Growing up near Detroit, I remember layoffs where the status of the laid off workers was specified in the union contract. I have not heard of this kind of layoff in recent times, outside of unionized companies.

Laypeople like me usually reserve "firing" for people who are fired "with cause." When companies fire people "at will," they often use words like "reduction in force."

Perhaps a better way of thinking about it is the consequences of being fired. If you are fired "at will," then you are entitled to things like unemployment compensation, COBRA benefits, etc. If you are fired "with cause," then you lose those benefits.

If an employee is a klunker, they will often wait for business to slow down, fire them "at will," and pay the benefits, to avoid potentially getting sued for false termination.