I guess it depends on the headlines you're reading. You'll only see it on HN if it's a tech company, and you're probably correct in saying that it was incredibly uncommon over the last decade of incredible growth.

But it's more common if you zoom out a bit and look at other industries that haven't been consistently booming. I went to university during an O&G downturn, and I had several friends who had accepted internship offers at oil companies which were cancelled at the last minute. There were even companies that suspended their co-op programs for students already working there. Students who had an 8 month internship arranged through the university were laid off in the middle of it and were left sitting on their hands since they weren't enrolled in any classes.

But I probably couldn't find any news articles about it, since those same companies were also going through mass layoffs at the time and nobody really cared about some interns having a rough time.

I think to certain extent it comes down to panic and chaos in the HR department. A chunk of people are fired, others quit or move to new positions. Projects are cancelled.

That has consequences for supervision of interns and would probably incur significant rescheduling and organizational overhead. So I see why something not considered "primary business, contributing to the bottom line" is simply cancelled.

Not great, though.

It doesn’t. You’re experiencing confirmation bias

How do you know it always makes the news when it happens if you aren't aware of every time it happens?