grammaticality - Would this sentence be correct?

There is clearly one too many "to" - no matter how you twist it, they both are a preposition referring to the words "be doing", so the second one is redundant. They are reduced to be doing this. This is what they are reduced to be doing.

Stylistically, however, "This is what they have been reduced to" is simpler and clearer. More importantly, here the preposition refers to the pronoun "this", whereas in the the sentences above, "this" is the object of the verb "to do".