Business unit performance is much more important than individual performance. Who cares if you do amazing work in some nerdy obscure niche that doesn't make money and never will?

I mean, you could offer those engineers transfers to not waste their talent…

That's what many companies do, but if you're cutting whole business units, and lots of them, you probably don't have as many openings elsewhere. It's a good incentive to generally gravitate towards projects/teams that are contributing to profits if you're an engineer though, and not just look for another position when your is being axed.