Question for Joel: What's the right way to let someone go?

One of my friends has been on an emotional rollercoaster over the last year with the number of reorganizations at her company. Despite being one of the company's top performers there has been at least 2 occasions when she's told me that she didn't know if she'd have a job or not.

This last time, the company decided to hold a mandatory conference call to announce significant changes including layoffs, "promotions" (larger territories but no additional pay) etc. They didn't give any advance warnings as to who would be affected or how they may be affected. I can't even imagine how everyone was thinking or feeling once they were informed about the call.

Yesterday I was in a meeting when a business partner sprung very unexpected news that threatens the viability of one of my clients. In that moment, I felt what so many other people must have been feeling this past year. When I think about that exchange, I can't help but think that the whole situation that unfolded could have been avoided if there was some honest dialogue prior to the meeting.

So I have to ask...could these situations have been handled better? If so, how?