Years ago I worked for a company in a consortium that put in a bid for a government contract. The government agency said the amount quoted was a bit high, and was there any way they could bring the cost down a bit. The consortium re-submitted essentially the same work as before but at something like a quarter of the cost of the first one. The government agency told them what they could do with their bid, and to never submit anything to them again.

This is the underlying reason. Basically need to free up cashflow to pay for data centres so got rid of the people as the easiest option.