I asked an executive this very question, and he said that the board was getting pressure from stock-holders to reduce headcounts, and justifying that pressure by pointing to other large companies who had already undertaken massive layoffs, and the resulting rise in their stock prices. In this way layoffs become a game of follow the leader – or like a contagion. “Google just fired a third of their workforce, why are we doing that? We should do what they did, look how successful they are.”