I agree with what you say, but pursuing relentless cost-cutting to the point it erodes employees’ confidence in the company is arguably not in the interests of shareholder wealth maximisation. Employee turnover incurs costs too even if they aren’t directly reflected in the P&L. This was true in my former employer’s case, since the specialised technical nature of the work meant it took new hires 6 months to get up to speed. There is a bias to thinking of employees as an expense instead of assets, reinforced by the fact that accounting standards don’t allow employees to be capitalised on the balance sheet.