Generally what happens in management is that a headcount reduction number is determined at an EVP or CEO level. At that point, they generally "spread the peanut butter" evenly (as McFresh likes to say) evenly to the orgs under them. So if they are supposed to lose 1000, and one of their orgs has 25% of their headcount, that org will absorb 25% of the reduction as well.
This happens all the way down to the VP/ED level. I will say that from my observation, very little thought is given to things like how efficient each organization already is, if some have better leaders and are already optimized, or if one group has already taken its share of cuts (say, before being transferred). It's just a spreadsheet number.
When it hits directors and 2nd line supervisors, they are basically told to do a 1-to-n ranking and take off the bottom X (whatever number they were allocated). By the time they get their number, it's usually a very quick process - a few days if that - to get these people marked in the surplus system. Even if notices won't be given for a month or so, they need to "lock in" the names. That's not to say they can't add or take away one down the line, but they want these decisions made very quickly.
Only in rare cases is any sort of tactical decision about "who" made at a higher level than this. Individual pay - to my knowledge - has never been used in making individual decisions. One time, we were told that only 2nd line managers could be surplussed (i.e. our entire number had to be absorbed by 2nd lines). That really hurt because that's where the experience was, and 1st lines had to step up to fill in second line work. It seemed pretty obvious that that decision was made to reduce pay in addition to headcount. But no decision about individuals has been made that high up.