I have had to lay off people and it is not pleasant. The MBAs will say it's all performance based but in reality how do you measure performance? Which is better: He gets results but causes all sorts of personality conflicts. Or, he's not fast but he never makes mistakes. Then there is the social issue, do you lay off the 20 something who can quickly bounce back. Or the 50 something with three kids and a mortgage who will probably never get a job paying as well as this. Again the MBAs will say it's irrelevant but anyone with a heart will tell you that you can't ignore this reality.
If your manager was told to downsize maybe you made the choice easier for her, and hey, you're the most likely to bounce back.