The underlying assumptions here are that companies can reliably identify poor performers (I would tend to doubt this, especially at a scale of tens of thousands

The underlying assumptions here are that companies can reliably identify poor performers (I would tend to doubt this, especially at a scale of tens of thousands of employees), that layoffs don't cause negative repercussions among the employees who are kept on (something I know from personal experience to be false) and that skilled employees of a no-longer-in-demand division would be unsuited to the new, hot division (a bugbear of mine is how corporations drive their employees to specialize, then lay them off once they thing they no longer need the specialization).