Foreign service officers based in foreign countries are necessary - which is why these cuts aren't affecting their hiring/posting.
Staff positions are the key area any re-organization targets (Oooh, that's a trigger word!). Modern business practices aim to reduce - to the bone - staff positions.
What, for those who didn't have any business experience/coursework, as staff positions?
Those positions whose function is to support the actual working individuals - in this case, those serving overseas in embassies.
Everybody else has to justify their position based on the demands of the CORE functions. Creating/influencing policy is NOT one of those core functions.