The Pareto Effect, applied to companies' productivity, states that 50% of the output is generated by the square root of the number of employees.
So, if you have a company with ~10 employees it's not a big deal, 50% of the output is generated by ~3 employees. However if you have a company with 10,000 employees, only 100 of them are generating 50% of the output; and that becomes pretty visible since each of these 100 employees knows most of the remainder 99, and most of the people they come across are "dead weight" to the company.
Give the company enough time, and the productive employees will leave to seek greener pastures, so - little by little - the company collapses.
The Pareto Effect, applied to companies' productivity, states that 50% of the output is generated by the square root of the number of employees.
So, if you have a company with ~10 employees it's not a big deal, 50% of the output is generated by ~3 employees. However if you have a company with 10,000 employees, only 100 of them are generating 50% of the output; and that becomes pretty visible since each of these 100 employees knows most of the remainder 99, and most of the people they come across are "dead weight" to the company.
Give the company enough time, and the productive employees will leave to seek greener pastures, so - little by little - the company collapses.