You miss the major factor in your compensation: pricing pressure due to supply/demand.

By removing all the junior engineers, you've fundamentally changed the market forces longer term and most people expect that to negatively impact you in the supply demand curve regardless of whether or not the statements you've made above are true, which they most likely are for senior engineers.

In removing junior developers, leaving only senior developers, wouldn't that reduce supply, making the price go up, not down? It's been a while since Econ 101 for me though.