It's of course an euphemism to name something unpleasant such as RIFs. In my view, layoffs mitigate business problems just short term. Long term issues are usually caused by mistakes in the product life cycle.
"Rightsizing" is a term which is typically used in conjunction with "lay-offs", "RIF" (reduction in force), "redundancies", etc.. A lot of words for the same ugly thing: Fire people. Not nice and no fun for all parties. To cut a long story short: If it has to be done, it should be done quickly. However, for me a reduction in force is always the ultima ratio. Plus, the problems causing the lay-offs occurred long time before and the necessary measures to rectify them failed, if tried at all.
Why is that? I believe that "rightsizing" fits also perfect to so called "strategic" projects or products which are overdue to be abandoned. But too often this is not the case due to a lot of reasons and hidden agendas e.g. "hope that it will get better soon", "rivalry between teams or managers" or simply "lack of alternative ideas".
A typical characteristic of successful companies like Google or Facebook is that they are frequently trying a lot of new things but do not hesitate to say "no" and cancel projects quickly if they do not fulfill the expectations. "Rightsized" projects or products free valuable resources to build new things instead. Permanent innovation together with constant rightsizing keeps the company healthy and competitive in the today's fast changing marketplaces. The book "Unrelenting Innovation: How to Create a Culture for Market Dominance" from the author Gerard J. Tellis describes this correlation very well.