Having worked for one of those names, I have to guess that this is probably clearing the bench rather than removing employees with billings.

More often than not, the bench exists to promise a customer that they have the people to "start yesterday" on the project.

The trouble with choking off the supply into the industry is that often the demand dies out as a result rather than increasing the price of a service - complete rewrites get shelved, new development gets postponed and sustenance projects use band-aids to treat bullet holes.

And that causes a trickle-up effect across the product companies selling into the industry - you don't sell new database licenses if billing systems aren't getting revamped and if that ripples continues, everyone upstream starts getting extremely frugal with their expenses.

Which is bad for the enterprise software ecosystem - the only folks who are likely to not notice that immediately will be small bootstrapped consumer companies, with real boxes to ship and lots of room to grow (or giant ones with room to grow, like a self driving car paid for by clicks).

I'm a bit apprehensive of drastic changes ever since I read the CA Budget (see last page of Economic Outlook[1]).

[1] - http://www.ebudget.ca.gov/2016-17/pdf/BudgetSummary/Economic...