The strategy probably works regardless of macro economic conditions assuming you let go of "lemons" at a greater rate than you hire them, but it seems easier when the market isn't being flooded. You could maybe argue that layoffs at other companies are reducing the proportion of lemons, but it's not clear to me.
I think reducing headcount gives an immediate outlook of lower expenses without affecting revenue in the medium term. Tons of employees at these companies aren't working on projects that will have monetary significance within several years if ever.
They don't only hire recently laid off people. Most people who apply do that for other reasons I think. Also, maybe eg Google s recruiting accuracy is better than other companies lay-off accuracy
I see - if they are cycling out the lower performers and hire recently laid off people on the market for a bargain, then that kind of makes sense, assuming they are not in a hiring freeze.