The Premier League leaders have apologised to fans after previously revealing plans to apply to the UK government's furlough scheme, which sparked a backlash from fans.
In a letter, chief executive Peter Moore said: "We believe we came to the wrong conclusion last week and are truly sorry for that."
He also confirmed the Reds have "opted to find alternative means" to pay its staff.
Staff affected would have received 80% of their salary through the scheme, while Liverpool - the seventh-richest football club in the world - would have made up the difference.
Moore explained: "Despite the fact we were in a healthy position prior to this crisis, our revenues have been shut off yet our outgoings remain.
"And like almost every sector of society, there is great uncertainty and concern over our present and future.
"Like any responsible employer concerned for its workers in the current situation, the club continues to prepare for a range of different scenarios, around when football can return to operating as it did before the pandemic."
The 'Anfield Wrap' podcast's Gareth Roberts is glad "common sense had prevailed".
He said: "They have seen the mass reaction and decided to reverse that decision. Common sense has prevailed in the end."