Thats simply not true. I know a guy who was the president of a division with >80m in revenue a year, and was "laid off" with 5,000 other people after 28 years with the company and never a negative performance review. His boss went to bat with finance people but lost. There is a formula and sometimes it says people at level X can't be paid greater than Y, and if they get paid greater than Y, they are laid off. Often the reason they are paid greater than Y is because they are good at the job. Not a smart way to do layoffs, but becoming more common because it is easier to fire top down than bottom up a lot of times.