Laying people off instead of offering to move them to the now-more-important projects has to be one of the dumbest management moves that tech companies repeatedly do. These are people already trained on all the policies and procedures and tooling and "culture" specific to your company.

It's going to be more expensive to hire and train new people when the dumdums in upper management finally figure out the mistakes they made that got them to a point where they decided they need to cut jobs and projects, and the ramp-up time before you actually start seeing progress on those priorities is going to be seriously lengthened. Of course they won't acknowledge it was their fault in the first place, and again the heads roll on the wrong end of the corporate ladder.