But that's assuming that you're hiring more programmers to do the same task. Programming is partitionable at a larger scale - if I hire more programmers I can start more projects/create more products.

So I guess what I'm saying is that for a one product company, yes, there is a point where the productivity loss from adding another employee gets very big. But for multi-product companies (think Google, Adobe, Microsoft, Apple), more employees just means more parallel projects.