I saw an article on HN a while back that showed the math for "senior" employees was affected by the amount of profit generated off them.

I think that it was pitched at sales, but maybe could be applied to ENG.

The thinking was - if you have X sized market, you price in Y for your staff and you take Z for the profit - as the price of your staff increase, if the size of the market, or your share of it, does not increase, your profit decreases.

So it makes sense (the article argued) to drop the senior staff, and bring in the lower paid, but almost as good, intermediates - the profit stays the same.