My company is doing the same thing. Layoffs haven't happened yet (but anyone who isn't in denial knows they're coming), but we probably had a record number of promotions.

The reason for this is that you want to butter up the employees you're going to keep before layoffs. Getting promoted after you saw coworkers you respect get laid off makes you feel gross, and companies do need to do something to increase morale.

The funny part is many people at my co. believe promotions are evidence that we couldn't possibly get layoffs.