The infrastructure isn't that much is the problem, because labor costs are the largest single expense. When you take that off the table as something that can be cut, you're then stuck needing to make up the difference from the things that never cost that much to begin with, which means the cuts you have to make to them to make up the same amount of shortfall are deep.

> If they were paying each employee 10x as much

They're presumably paying the market rate either way. The issue is, what happens if they need to reduce the number of employees? Or they have too many front end developers and not enough back end administrators or vice versa, and then need to let some people go and hire others with a different skill set?