It sounds cynical in retrospect; at the time the same set of facts were explained differently, in a way that didn’t hurt people feelings.
At the FAANG I was at, we were pushed to interview interview interview, and the company tripled in size in two years.
We constantly questioned the motive for more engineers, when we had plenty already, constantly seeking alignment. The rationale was more engineers meant we could make more products more quickly.
It never worked, and caused huge headaches that never really went away. It didn't help that team size was made a specific goal of a number of VPs. So it because a goal to grow team size, rather than a business need
And because the VPs were doing it, a whole bunch of people down the hill started copying then, using team size as a forcing function for power.
And if competitors were in the same boat, why bother hiring these people at all?
Cheaper to just lock up the talent and burn the wages. Bit of a ding to your books, big ding to your competitor's capability.
In saying that, it's a terrible practice. Massive waste of time, opportunity, talent and money.
Suppose an established org (N) got disrupted by a startup (N+1) because the startup was able to do things faster and cheaper. Once the startup becomes the established org themselves and slows down a bit, they are exposed to the same risk, unless they hire all the smart people (who would otherwise be hired by N+2 startup) and buy out all the N+2 companies who actually managed to do something despite having less money. Eventually it becomes too expensive and there is a good excuse to fire all those people. I don't think it's 100% of what is happening, but it could be.