Cuts are done because the business has changed. Some part of the business was destroyed by external factors, and now the company needs to adjust to the new real

Cuts are done because the business has changed. Some part of the business was destroyed by external factors, and now the company needs to adjust to the new reality. It could be that VC money dries up or that customers stop spending. It doesn't mean that 20% wasn't required in the past, only that they are not required now. This is also why a company should cut a little more than needed, so they have some cushion for things to get worse before getting better again.