> If that was true, it would be a last in first out layoff, which is not the case.

That doesn't follow. What you hire for at one time because you think it's profitable to do so is not necessarily related to who you let go at a later time because you think it's profitable to do so. Market conditions and other factors have changed in the mean time.

> From what I gather it doesn't even match with the performance ratings (i.e not straight out the bottom 6% of the "stack")

And it shouldn't. Who it makes sense to let go of has a number of factors, not just performance. Even software developers are not a homogeneous resource, and ROI on an employee is not just about performance.