Bingo. I find that limiting headcount is a great forcing function for only doing what's important. The classic example is Google making X different chat apps. That doesn't happen unless a company is severely overstaffed.
To me that really just screams lazy and incompetent management. Being overstaffed is just a coincidence. A good mgmt structure would have prioritized that roadmap and gotten the cats herded to work towards a singular goal/chat app. I say this as a "cat" myself who has to be reminded to not get distracted by the next shiny thing.
I'd say it's not. But causality is the reverse of the GP's.
Being overstaffed is a consequence of not prioritizing the work. Either the staff grows until the important things get done, or the organization shrinks because the important stuff doesn't get done.