Exactly. The problem is instead of getting a raise because "you can do more now" your colleagues will be laid off. Why pay for 3 devs when the work can be done by 1 now? And we all better hope that actually pans out in whatever legacy codebase we're dealing with.

Now the job market is flooded due to layoffs, further justifying lack of comp adjustment - add inflation, and you have "de-valuing" in direct form.