The python team is moving abroad, not undersizing. At least, that was my reading of it. I would argue this is different than over hiring. Over time, in cheaper areas, the hiring may even expand.
In the US there seems to be a focus on the southern border and immigrants taking mostly low paying labor jobs. Is there a focus on foreign labor, outsourcing, taking high paying jobs?
Yes. Part of the white collar recession.
Let me retract the word undersizing a little bit. A lukewarm step before undersizing is lowering cost by lowering quality. That's what we're witnessing.
I assume removing long standing people on a project would greatly decrease quality. I am sure that google wont spin it that way. I wouldn’t go as far to say that cheaper labor always means less quality.