Sometimes layoffs start at the top: Intel to lay off 1,000 Managers
The ironic thing is that some percentage of these managers have people working for them who make more than they do, but they are the ones being cut because they are a "manager". This is one reason why I negotiate hard on compensation and not so much on title. I can't buy food with a title, after all, and sometimes a title makes you a bigger target.
A lower title also means that people who put a lot of stock in titles - you know the type - end up underestimating you, which is usually a good thing in a political battle.