Because if you can buy something for $9, why pay $10, even if you have $500 in the bank?

Same reason that someone who's "rich" and "makes good money" would still negotiate the price of their new BMW/Mercedes or their house.

From here down isn't especially for five year olds, but I think it's still graspable.

Running a company properly (by many investors' definition) is an optimization problem, not simply a constraint satisfying problem. If you can have 4000 fewer employees and be more profitable in that state than in yesterday's state, investors will expect you to do that, even if you're currently profitable. (The costs [monetary and morale] of doing layoffs inject a certain amount of stabilizing hysteresis into the system.)

I don't know if you work at a huge company. Maybe you do. I've worked at a couple.

Like government, large companies provide a sheltered environment where things happen that couldn't survive out in the real world. Sometimes that's high risk research - Google X, the Manhattan Project. Usually it's people who don't know excel supports formulas, and departments that could be replaced by a web form.

These are protected by many layers of politics, and natural human compassion by managers at all levels who don't like firing people.

Every layoff I've seen, the subtext has been 'lop off the deadwood'. They would make up a reason, but everyone would know.

Because companies don't employ people to be nice or because they can afford to, they employ people because the money they make doing so is more than the amount it costs to employ those people. Even a rich, successful company may fire people (even a lot of people) if that saves them more than they lose in productivity. Since not all employees are create equal, this is likely very easy if your company hasn't been very good about maximizing productivity of every employee.

One reason might be to get ahead of something they foresee hurting profits in the next quarter or next year. Not to wait until it shows up in the bottom line.

"like I'm five"

Ok here it is for a 5 year old.

You have a 10 lemonade stands staffed by 10 people. You've had a good year and have made money. But next year you will loose 3 of the stands and so you are going to get rid of three people because they won't be needed even though you made money fine this year.

It could be because I am changing my business.

Let's say I am a Big Tech Company. I make Gadgets and Widgets. If I decide I don't want to make Gadgets any more and make only Widgets, then I don't need the people who make Gadgets. SOME of the people who made Gadgets could be retrained/repurposed to make Widgets, but some can't (or don't want to). Those are the people whose jobs I will cut. And of course, I will use some of my "tons of cash in the bank" to give them severance packages to compensate while they search for jobs in other companies who make Gadgets.

Want, not need.

Employees cost money. Companies want to cut costs.

They just don't have enough work for everybody. They could create new projects and assign people there, however it's very difficult to come up with new ideas that will make money. And of course they can employ people who don't have anything to do.