I don't experience many problems with Twitter, not visibly more than before the layoffs.

But still, let's assume the reports are true and there was nontrivial reduction in reliability... It was a very extreme engineering cut for a service which is still "generally working". I believe that tech executives are simply assuming that Twitter's decline has a lot more to do with Elon Musk's controversial persona than the service's reliability. While an 80% cut might be too much, they think, a 20% cut would work just fine.