Why are companies seeing it purely in terms of "we can work with a smaller team so we must" and not "my existing team can do so much more"?
These companies could spin up entirely new lines of business, but why? It's much better for someone else to start that business and hire the best people for it.
There is no reason why businesses must continue growing, or even existing - even if they are run well and profitably. The universe changes, and business come and go to align with that.
"Infinite growth" framing is asking a lot, but for most of my career, I've seen teams, departments or companies solicit ideas of what to do next quarter/year/whatever, and really aggressively winnow it down -- in large part b/c there weren't enough people to do it (and we could only afford so many people).
And we were _bad_ at prioritizing; we'd often have like a list of multiple things declared P0 and a longer list of things called P1, and a stack of stuff that didn't make the cut to maybe revisit in the future.
But if the same number of people can build and ship and iterate faster, then why not do more?
To the extent you have successful products, it's because you have product managers and engineers and data scientists and depending on the product, integration/forward deployed staff. These should be the people with a view to how the product needs to meet the needs of future customers, the challenges faced by existing customers, and the technical components needed to get there. I'm not saying you encourage them to just spitball ideas from ignorance, I'm saying you solicit their expertise on the limits and needs of your products, systems, tools, processes, messaging etc.
If your goal is to pivot the company into new verticals, or to develop an entirely new product, then "asking staff for ideas" isn't a likely way to succeed.
Most of the staff doesn't have the visibility into the business to understand what may or may not make money. You can have a great idea, even on that could be a successful product, but it could still be a bad fit for the business.
Their stock price has been flat for like 4 years and they have no advantage in this new AI world that would change that. These layoffs would have happened AI or not.