Did ITT have the right to unilaterally change the layoff policy?

Roger DeMasse and five others were employees-at-will at ITT Corporation, where they started working at various times between 1960 and 1979. Each was paid an hourly wage.
ITT issued an employee handbook, which it revised four times over two decades.
The first four editions of the handbook stated that within each job classification, any layoffs would be made in reverse order of seniority. The fifth handbook made two important changes. First, the document stated that “nothing contained herein shall be construed as a guarantee of continued employment. ITT does not guarantee continued employment to employees and retains the right to terminate or lay off employees.”
Second, the handbook stated that “ITT reserves the right to amend, modify, or cancel this handbook, as well as any or all of the various policies [or rules] outlined in it.” Four years later, ITT notified its hourly employees that layoff guidelines for hourly employees would be based not on seniority, but on ability and performance. About 10 days later, the six employees were laid off, though less-senior employees kept their jobs. The six employees sued.