They can certainly find more talent in the bay area, if they were willing to pay even more.

In SV and SF, half the paycheck goes to the GOv and the other half goes to real estate.

If you want to cut labor costs, Simply find a city with a lower cost of labor. There's plenty to choose from: Austin, Dallas, Houston, Chicago, etc. All of these places sport roughly 100K salaries for senior devs. They could hire all the engineers they wanted.

And of course, there's always the final (least palatable) option: Improve your highering process. It's pretty ridiculous when half the employees of your own company wouldn't hire the other half.