https://tech4gamers.com/baldurs-gate-3-publisher-greed-for-layoffs
I'd argue that from both a creative/artistic and financial stance, this point has a lot of merit.
You cannot produce good creative work if the people working on a project are hamstrung by lots of studio notes, conflicting visions, and unclear leadership. Most companies at any size fail to grasp this, and treat people who do creative work like factory workers who must be told what levers to pull on an assembly line.
As a business, if you're constantly vacillating between hiring gluts and layoffs, you need to slow down and think about what you're doing. That's no way to run a healthy business, first of all, but it's a disaster for employees who can't allow themselves to get comfortable and focus their attention solely on making something awesome.
If you want to make good games (or movies, books, tv shows, etc.), the creative team needs to have a lot of freedom to experiment and explore, inside a context where one person sets a clear vision for what the team is trying to accomplish.
Too many cooks, too little autonomy, fear of upper management -- all these things will kill creativity faster than anything else you can imagine.