The law change would double the period for which severance had to be paid. This additional liability would have been a significant fraction of the net worth of the company.

The 2008 financial crisis had left the company in a position where it needed to downsize anyways, and the board of directors gave the CEO the choice between covering that liability by making the US layoff bigger, or avoiding the extra liability by getting rid of basically the whole Argentinian operation. The CEO chose to preserve US jobs.

The Argentinian operation would have seen a layoff either way. But nowhere near as dramatic as the one that actually happened.