> I suspect they aren't getting rid of the talent.

If you just announce a layoff, you are already getting rid of talent.

> It's more likely to be a fat trimming exercise.

Large companies can't lose fat in large strokes. There is simply no way to organize a mass layoff that results in "fat trimming".

> fat trimming exercise

The company that is most notorious for having an aggressively difficult interview process has "fat"? How?

Hiring process is never perfect, you find after 6-12 months you made a mistake. I saw that many times, I did that myself 3 times (hired people that were later fired, even after being promoted, as they did not perform well even if they were really good on paper and in interviews).

Perhaps the interview process is not as good as they think.

How did they get promoted, when they did not perform well?

Diversity targets.

No hiring process prevents bad oncall rotations.