In almost every large company the incentive structure is such that hiring is a "win" for everyone involved. It's a win for the HR team doing the hiring, often they have quotas. It's a win for the manager getting more headcount under their umbrella, adds perceived value and status which leads to promotions. It's a win all the way up the ladder, because it adds perceived growth (remember how many VCs used to tell startups to hire and spend fast?).
The decision maker at the top is usually too disconnected from the rank and file to see the bloat. And the ones that aren't tend to be ruthless about headcount.
That’s not at all now this works. It’s a convenient myth for senior executives to absolve themselves of their own failure to build incentives and sustainable culture.
Managers don’t get headcount without allocation. It needs to be budgeted and approved.