From my - perhaps "limited" as it's only been to a few years - experience they aren't _all_ let go. With the rest, its easier to start fresh with lower paid devs than give raises to the older engineers who will begin to request being paid appropriately for their time and commitment.
The people that built the flop get to look for a new job building someone else's future flops.
I'm waiting for the surge of native developers fleeing from the food delivery gold rush startups before starting on our native app.