Low-performers are not relevant to this discussion. The accusation is that the companies hired more people than they knew what to do with / could apply product

Low-performers are not relevant to this discussion. The accusation is that the companies hired more people than they knew what to do with / could apply productively in their business. If such a basic task is beyond the capability of decisionmakers, who is to say that they are capable of collecting the feedback from rank-and-file employees required to assess who needs firing? Mangers have many concerns apart from Performance, suppose we have Steve and Bob, and Bob is 50% more productive than Steve, but Steve is in the middle of delivering a critical project, millions of dollars are on the line. Meanwhile Bob is in between projects, and today they decided they must fire some staff, who do you think will get fired? Also, is performance one metric? Suppose Steve writes worse code, but the business folks love his presentations, he is really good at explaining the issues facing the team. They can put Steve in front of a corporate client and win business. They never see much of Bob, even thought he is doing most of the 'real' work, so who is more valuable? Unless you are dealing with someone totally incompetent, these questions are usually 'which skillset do we need most' and they are not so simple.