Higher management doesn't know who is productive and who isn't. The good lower-level managers have that visibility, and let's say the poor (or mediocre) managers don't.

But whoever has that visibility, they would have already taken steps to get rid of underperformers and replace them with good performers. Therefore good managers have disproportionately good people.

So when the senior management says "everyone lay 10% off", the good managers lay off good and bad people, and the poor managers lay off random people. The result is lots of good people get laid off, even if everyone is trying to avoid that.