I don't have the experience to back my opinion, but my gut agrees.

Intuitively, it would seem to me that hiring past a certain threshold increases need to hire more engineers rather than quenching it — that is, the complexity resulting from changes made to the projects to keep such a high number of engineers productive approaches or even outstrips innate complexity and becomes unsustainable, demanding ever more engineers to keep it all afloat. Following this, a company that isn't keeping an eye out for net productive decreases as a result of hiring could end up with far more engineers than they actually need.

But I've always been an individual contributor, so my perspective may be limited.