@sickburnbro @lethn @Aether You're assuming the people cut are actually the lowest performing, it's political so that's often not true.
I've been in a big companies decline and fall where they were just cutting to survive, and in an essential for the company's survival product project, where they made a point of firing the best guy, all but explicitly telling us that was to prove no one was safe (the company of course died).
And how many cycles before the employee's #1 focus is on surviving next year's cuts? At the highest level, they sabotage other projects like Microsoft's Kin, a billion wasted along with massive brand damage including it's nascent cloud offerings.
At all levels, you can never assemble a team of top rankers, because at least one will be fired every year. At the low level, managers will go as far as hiring people they plan to quickly fire, just to protect the ones they need to keep. Amazon's now the paradigm of the latter.