Feel free to contradict me with personal experience, but I actually posit that (like many interesting phenomena in life), the truth is exactly the opposite. The number of people in a team expands to fill the budget allocated. That budget flows from a legible & convincing narrative told to the check-writers (internal or external) that may or may not overlap with reality.
Managers have an interest in expanding their "fiefdom" and thus push to get more and more people (either by grabbing actual work or by generating work). This is indeed how you create a "legible & convincing narrative" to increase your budget (end goal being more people, more power).
In some startup envrionments the execs may want to show growth by hiring as much as possible but that's not your typical company.
