Correct. That's my reading too. They wont be comfortable firing since I have always got high rating and have a very good reputation. In such cases, they resort to this. I think its a common industry practice.
It is tricky politics. It is hard to explain to HR why someone with such good ratings has to be fired (or the potential of lawsuits),
but OTOH, they might think that you are overpaid and classic ageism (atleast what I hear is that if you aren't management by 40s, ICs are too expensive and can be replaced with cheaper 20 year olds to do the same tasks).
It is sad that our industry sees programmers as pieces of meat to be replaced when necessary, but that is the hard reality, most of the times.