If you know people affected, then you have more information than me and I'm not going to pretend like I have a better grasp on the situation than you.
However, the "last resort" comment I made was a guess to their reasoning - it wasn't an authoritative explanation. My core point is that Amazon seems to think they can do the same, or about the same, or an acceptable amount less with fewer people. If that's the case, then from their perspective, they're overpaying on labor. That's it.
From the outside looking in, if your "last resort" comment truly was a guess to their reasoning, then I'm rather shocked. We're both on HN, so I have to assume we both work in tech and have access to the same information regarding why Amazon has earned its awful reputation.
Beyond that, I agree with your larger point, with an asterisk on "overpaying", as I do think an American company should have an incentive to prevent laying off workers just to refill them with offshoring and hiring H1Bs, especially at Amazon's scale of profitability.
I think you're missing a more human point: people dislike the effect of hiring and firing thousands of people with zero consideration. They hire thousands because it makes management look like they're ramping up to solve problems, and then they fire this many people because it makes management look like they're cutting costs to be more efficient. It's all about management keeping up the illusion that they're "on top of things", when in reality they're just playing number games.
There's empathy involved in the revulsion toward this kind of process. Please take time to consider that not everyone fired is a $300k/year rockstar programmer who can just as easily walk over to Meta or Google for a job. I know of people who have uprooted their lives and work under the idea that if they do a good job they'll stay on, when in fact the reality is more like gambling and they could be fired at any point.
However, the "last resort" comment I made was a guess to their reasoning - it wasn't an authoritative explanation. My core point is that Amazon seems to think they can do the same, or about the same, or an acceptable amount less with fewer people. If that's the case, then from their perspective, they're overpaying on labor. That's it.