This is spot on. I'm always amused when people talk about how much staffing a given product "needs". That's not how headcount works or even system design works.

What actually happens is that company headcount grows based on how much money they make (or how much they raise), this justifies hiring more people. Then, structure is added, both to systems (eg. microservices), and to operations (eg. jira, workday, salesforce, etc) so that communication overhead doesn't grind everything to a halt. Then, once the business stops growing, headcount must shrink. This may take a long time, and it will be couched in all kinds of corporate bullshit to try to preserve morale and investor sentiment, but that is all window-dressing.