It's more devious than that. If company A lays off 1000 people due to "legitimate" reasons (e.g. twitter generally doing poorly), that's 1000 people looking for new jobs. Company B, C, and D can then take that as an opportunity to lay off 1000 people each that aren't immediately vital to the success of the company. Company A might not have the funds or desire to rehire right away, but the other three will slowly start building back up. You end up with 4000 people competing for 100 open positions. Many may not be willing to accept a pay cut, but some percentage will, and gradually the rest will be slowly starved down to accepting less pay.

Software engineering is notoriously a high paid career path, and executives at these companies hate that, so any opportunity they get to suppress wages, they'll jump on. Especially if you know every other big company is doing it to, so they won't be able to turn that into an advantage against you