But if times are good and everyone is performing well enough and contributing, why get rid of them? If they're not performing well enough, then you shouldn't need stack ranking to figure that out, and you don't need to arbitrarily set a percentage of employees to put on performance improvement plans or fire.
It depends. In medium and large (and even some small) organisations, the intention behind layoffs is not only to save on the salary bill, it's to cut those divisions, projects, groups initiatives and work units that are a net loss or that are not contributing to the bottom line.
IOW, the intention should be to get rid of certain positions; it's a side-effect that people are usually in those positions.
For example, at Amazon I would imagine that even the high performers in the Alexa team would be considered for layoffs over the low performers in the cash-cows.
It's positions that get laid off, not people.
There seems to be an assumption people will interview for their own job again at the end of the severance period.
But that's kind of irrelevant when layoffs are coz shareholders want more returns this yeah, not because company has problems...
Companies change product strategies all the time to pursue profit, trim unprofitable ventures, etc., and that's all fine. But it's dumb to lay off good employees when they can just be re-deployed somewhere else, assuming the company isn't having financial hardship that actually requires them to shed headcount.