First of all skips the part why non-tech companies need so many people?
There is a number of factors:
* selection bias. We are talking about these companies exactly because they are large. There are companies like WhatsApp was before acquisition that only needed couple dozen people.
* scale inefficiencies. As the company grows there are various forces that make individual contributor less productive. Try to prepare a large party in your kitchen. Want help? If you add another person it will surely get twice as fast? What about 5th person? What about 10th? As you add more people, people will start getting in the way in various ways or will start working on less valuable goals because the most valuable ones are already well covered.
* success breeds problems. While the company is small, cash strapped, it is easy to get everybody focused on a single goal because there is literally nothing else they have cash or people or focus to do. But when the company finally succeeds and they get a lot of cash, there opens a wealth of possibilities but also a perceived necessity to spend that money, invest it in future profits and also to diversify. This causes rapid proliferation of new lines of business and experimentation and each one of those experiments is probably another company. But not as focused because they are not as cash strapped and reliant on efficiency to survive.
* strategic growth. Above all, once the company finds success in one area, the next goal to pursue is to avoid death. If they build one product and stay focused on it there is a good chance they will at some point get subverted or the market will dry out. One way to deal with this is to just start doing a lot of things in the hopes some of them will pan out.
* emergent effects. Large groups of people are showing emergent effects that are very difficult to battle. Every person has their own motivation and their goal is to stay in employ, get raises, get promoted, etc. All these are more important for most people than the actual good of the company and efficiency. These effects cause departments to grow large unnecessarily (because each manager wants to have as high budget and headcount as possible).
Don't forget government taxbreak to jobs programs. It may be a small factor in the tech world, but cities love giving X% tax breaks as long as the company brings in Y jobs.
I don't think companies hire more people due to those jobs programs. I think what typically happens is they use those programs to hire people they would hire anyway AND get a bonus. Or maybe just shift where they hire people.
First of all skips the part why non-tech companies need so many people?
There is a number of factors:
* selection bias. We are talking about these companies exactly because they are large. There are companies like WhatsApp was before acquisition that only needed couple dozen people.
* scale inefficiencies. As the company grows there are various forces that make individual contributor less productive. Try to prepare a large party in your kitchen. Want help? If you add another person it will surely get twice as fast? What about 5th person? What about 10th? As you add more people, people will start getting in the way in various ways or will start working on less valuable goals because the most valuable ones are already well covered.
* success breeds problems. While the company is small, cash strapped, it is easy to get everybody focused on a single goal because there is literally nothing else they have cash or people or focus to do. But when the company finally succeeds and they get a lot of cash, there opens a wealth of possibilities but also a perceived necessity to spend that money, invest it in future profits and also to diversify. This causes rapid proliferation of new lines of business and experimentation and each one of those experiments is probably another company. But not as focused because they are not as cash strapped and reliant on efficiency to survive.
* strategic growth. Above all, once the company finds success in one area, the next goal to pursue is to avoid death. If they build one product and stay focused on it there is a good chance they will at some point get subverted or the market will dry out. One way to deal with this is to just start doing a lot of things in the hopes some of them will pan out.
* emergent effects. Large groups of people are showing emergent effects that are very difficult to battle. Every person has their own motivation and their goal is to stay in employ, get raises, get promoted, etc. All these are more important for most people than the actual good of the company and efficiency. These effects cause departments to grow large unnecessarily (because each manager wants to have as high budget and headcount as possible).