Google used to be exactly like that up to a decade ago. Talent was considered core for the org so you would be relocated rather than cut off.

Values shifted with the focus on earnings and growth getting less impressive.

Rewarding managers by headcount is like rewarding software engineers per line of code, yes, but that is how basically every company rewards managers.

Imagine how obnoxious code reviews would be if everyone wanted to submit as many lines as possible for their salary to go up, that is how management headcount requests works today.

The problem with this (and I was also in an org that didn't get any headcount -- for several years) is that those non-growing teams often ultimately just wither and die, whether it's through internal transfer, attrition or layoff. Google doesn't really reward managers for their managerial skill, and there's nothing that says "managerial incompetence" at Google more than having the same size team for years on end.

Maybe that’s okay though? It’s not like every team is supposed to exist forever. You could argue it’s ineffective or inefficient at this, perhaps.

The idea that a manager’s success should be measured in the number of people below them is truly idiotic. That is how you end up with companies like Google increasing their headcount by massive amounts during the pandemic only to have to turn around and do layoffs a year later.

Middle managers serve a role but honestly many of them can be replaced without really disrupting anything. At a certain point, you become too far removed from the actual work that is being done to really matter.

On the other hand, there are many low level managers with teams of fewer than 10 people who can be very valuable and hard to replace. People with deep expertise in the specific area they work on.

Measuring a manager by their headcount is just a lazy way to evaluate impact and calculate salary.