All companies go through a business life cycle, the startup where innovation and creativity are king, to gaining market share and establishing a position in the industry, to peak market share and possibly the peak of the market itself, depending on anything from technological advances to geopolitical changes like moving most manufacturing to China and India.
For these reasons, almost all companies will have a "shelf life" which is the duration a company can remain relevant, and therefore profitable.
To top Executives, these concepts are basic and well understood. They know exactly where the company is in its life cycle, as well as the industry they are in. So, when they decide to expand, contract, or even bring to a close the business, it's done with a deep understanding of what the future holds.
Unfortunately, the average peon working for these companies is utterly clueless about these things, and so if they see decisions being made which are "bad for the company" because to the peon it just looks like the execs are making a mistake, when in reality they're purposefully bringing the company to a close, the peons ignorantly assume the execs are stupid or incompetent.
The execs know this, and just laugh, because that's all you can do when a 3 year old tells you that you're "doing it wrong!"