I think it's unfortunate that your husband feels uncomfortable remaining friends with someone just because he becomes a superior at the workplace. My husband had 2 friends that were friends of his for years (since HS). They asked to work for him and when he did finally agree to hire them and get them into the business, it seems they didn't want to do things with us anymore. And, both only worked for my husband for 1 year until they were able to buy their own businesses within the organization. We went to one of their daughter's birthday parties and as I mentioned (they were HS buddies), we were introduced as the "boss." That actually felt awkward to us!
Business is business and your personal life, regardless of how business relationships work, shouldn't be affected. It's taken a few years and bumping into each other again at mutual friend's parties, and now we're okay. But, I would always invite them over to our place for BBQ, etc. and they wouldn't come out. So, I say if your husband feels so awkward about it, perhaps he should try to realize that your friend's husband may not and it's not as big of a deal as he may think. Layoffs are unfortunate but in the business world, they are inevitable and people can't take them personally. In order to avoid lawsuits, companies must follow a standard protocol when determining who stays and who goes.
Good luck.