Alternatively its a disguised reduction in workforce. Doesnt impact the stock like a layoff but probably has a non-negligible impact culling some employees from the herd.
When you cut pay are you more likely to lose your best and brightest, or those without better options? Sure, maybe it helps the bottom line now, but lowering wages to reduce head count is the best way to ensure brain drain (in most cases, obviously there are exceptions to everything)