Companies are inherently shortsighted and beholden to their customers and shareholders (in public companies). Prolonged social attacks against a company may drive customers away or drop stock value, both of which negatively impact the company (and more importantly management) far more than letting one employee go. This probably significantly harms employee morale, but I doubt that's their primary concern.
I know the reasoning, but I suspect it's based on wrong assumptions. Management is afraid of taking a stand and doing the right thing, even though it would most likely end up well for the company, not bad. I see this as risk aversion.
