There is periodic pressure to return to [greater] profitability, at which times companies fire like mad. Either it's a higher level of management realizing one branch of the org chart is stupid and directing its removal, or a directive from the top "figure out how to cull 10% of the workforce".
Between those events, however, managerial accumulation of influence takes over.
Maybe c-suite execs don't rip out excess staffing immediately because, even operationally, it's not all downside:
Within a relatively small branch of the org chart, having more than bare minimum staffing (with some of them doing bullshit jobs) provides a human resource buffer that might be tasked with solving really important problems that crop up sometimes: significant new requirements from a customer, or, if the incentives are right, opportunistically solving non-critical persistent problems (e.g. refactoring more) or automating more. I guess there's not enough pressure from higher management to keep teams to true personnel requirements + a few extra, so the "few extra" grows like mad.
Within a larger branch, occasionally having "excess" staffing for internal corporate competition is good. One of the best strategies for large projects (like larger government contractors) is to run two teams each with half the budget and select the best result. It seems insane from a naive perspective: wouldn't it cost nearly twice as much to have double the headcount? But it doesn't seem to, especially when the vast majority of project costs are labor costs or linearly related to staffing (rather than external resource costs, which are more static—though even for resource-intensive projects, internal competition provides incentive to figure out how to use less resources).
There is periodic pressure to return to [greater] profitability, at which times companies fire like mad. Either it's a higher level of management realizing one branch of the org chart is stupid and directing its removal, or a directive from the top "figure out how to cull 10% of the workforce".
Between those events, however, managerial accumulation of influence takes over.
Maybe c-suite execs don't rip out excess staffing immediately because, even operationally, it's not all downside:
Within a relatively small branch of the org chart, having more than bare minimum staffing (with some of them doing bullshit jobs) provides a human resource buffer that might be tasked with solving really important problems that crop up sometimes: significant new requirements from a customer, or, if the incentives are right, opportunistically solving non-critical persistent problems (e.g. refactoring more) or automating more. I guess there's not enough pressure from higher management to keep teams to true personnel requirements + a few extra, so the "few extra" grows like mad.
Within a larger branch, occasionally having "excess" staffing for internal corporate competition is good. One of the best strategies for large projects (like larger government contractors) is to run two teams each with half the budget and select the best result. It seems insane from a naive perspective: wouldn't it cost nearly twice as much to have double the headcount? But it doesn't seem to, especially when the vast majority of project costs are labor costs or linearly related to staffing (rather than external resource costs, which are more static—though even for resource-intensive projects, internal competition provides incentive to figure out how to use less resources).