So how is X still working after so many people fired year ago?

I have zero internal knowledge, so this is all just speculation, but a few things are possible:

1) They really were over-staffed.

2) The people who remain have simplified it to match the new staffing.

3) The system was stable enough to not need constant interventions and updates, so it keeps on running... but the people still hope nothing breaks because they have no idea how to handle a true emergency, and it is just a matter of time until they are truly hosed.

Running a stable service/ maintaining a product doesn’t require lot of people. But to improve, experiment, R&D, introducing new features, functionality, new products and services, new customer/user targets, growth requires lot more people. X might be stable but is it growing? If a business is not growing … … …

There's a couple possibilities. The main possibilities are that those people were totally unnecessary and firing them was completely justified; otherwise, they were doing useful work, and the company is either able to run on the fumes of their work for a few years before things really start to fall apart, or else what they were working on was essentially projects that were completed but don't require so much ongoing maintenance.

It's probably all three and will depend on the person in question which of these 2.5 categories they fit into.

There's also of course the part where people were doing work considered useful based on the goals of the prior company leadership, but who's services aren't missed by the new leadership in meeting their goals.

Maybe some enterprise cruft and empires. Maybe some people doing stuff that will prevent Twitter getting sued in the future.

More people can get less done due to communication inefficiency.

That's the point the Elon Musk critics made, in reverse. I see what you did there :)