They are creating this very surplus by firing 16,000 people who already did. And that's on top of all the mass firings last year.

FAANG has been engaged in mass layoffs for two years now. How can you possibly make the claim that there is a surplus of people who can pass the interview loops? Obviously, there isn't because they are firing people who passed those loops.

Quality outcomes of top tech employers are still somehow lacklustre despite all that.

Then why all the layoffs? You don't fire people you've got a shortage of.

https://layoffs.fyi/

The domestic talent exists, and companies can leverage it or be punished financially for attempting to “contain labor costs” through leveraging visa workers.

Ok, then hire them on an O-1 visa. H1B is the problem as it creates a indentured servitude class that is going to work for less.