In a layoff situation, the management chain is asked to identify who on the team to layoff.

The manager looks at the value created by each team member, and the cost.

For employees where the direct value and direct cost are clear, this is easy (ish).

But many employees have indirect effects that influence far beyond the team's borders (sometimes much farther).

The manager won't be able to see that indirect effect, and even if they could, they're managing their direct cost of keeping that head against a fuzzy, diffuse indirect value.

The manager pays the direct cost, but doesn't get the indirect value, so their balance point will be wrong.

So you'll over-trim things that are creating indirect value.