zlacker

Well, the logic is/was that an engineer you hire on for 300k is now unable/less incentivized to go launch the startup that would threaten 20 million or whatever of your revenue. Now these employees are rare, and hard to find, so the 300k is what you pay knowing you also end up hiring duds.

It's also better from a managing perspective because if you have 10% of bloat and then have a bad quarter, you then have a lever you can pull to show you are getting stuff done. Its how managers smooth their performance, you overhire in good quarters to lower the profitability comps, and then fire to buffer up bad quarters.