Well, the dynamic they've introduced most strongly incentivizes competent [read: employable] employees to leave so certainly that will improve overall team performance and they won't need to continue layoffs /s. To call it a death spiral would be excessive, but negative-divergence quality spiral just lacks that special something...
Life in a contracting industry sucks as a general rule, Meta has presumably decided that shedding weight is worth the nth-order effects. It's a strong signal to move on or start cultivating new skills now IMO.
Some people will now work the system and want to be made redundant, by doing the minimum possible.
Good people will leave for other opportunities.
This takes months/years to fix/heal. The fixing process is reset every time you do a new round of lay offs.
As far as the article, I know it is referencing the "flattening" but my point is none of us (besides Mark Z) really know for sure.