Probably all of the above is true.

From an outsiders, it looks like all of FAANG has scaled to the point where delivery, perf and managing the business has become quite cumbersome. This, I suspect is why they're all used the economic climate to cut back, as they largely are unable to see the benefit of the additional hiring.

I have no doubt most of the talent is top tier, but being a strong engineer doesn't deliver profits nor cost savings on it's own.