They didn't need to do this to stay profitable.
Companies exist to produce profits, not to provide employment. If an employee is not providing net value, then it is better for the company, and the overall economy, for that employee to go somewhere else. In the long run, it is better for the employee as well.
Many employees are cost centers rather than profit centers. IT costs money. However, IT keeps the wheels turning and hopefully allows profit centers to be more efficient so as to increase profit per employee. By your reasoning, getting rid of IT would be a good thing, that is, until some outage prevented profit center employees from using their information infrastructure to do work and make money.
Living on Earth may be expensive, but it includes an annual free trip around the Sun.