Yes, but not immediately. This is how it works:
1. There are a finite number of software engineers capable of competing with FAANG.
2. You outbid outsiders. At times, talk to your friends and tell them not to gum up intra-clique recruiting.
3. This continues for a long time, but at some point, salaries get a little too high.
4. Flush everyone all at once... resetting the baseline of what a tech salary "should be." This resets expectations for all the new talent coming in that might compete with you.
5. After the tech salary "should be" a few tens of thousands less... quietly start (2) again.
If you time it right, (2) happens when money is cheap and it's easy to found a competitor, while (4) happens when there is a "tech downturn" and VC are scared. What a tech salary "should be" is quite sticky, it takes a few years of (2) to actually change baseline expectations.
The existing cultural understanding of what tech workers "should be making" influences: what do the most promising new hires demand? how aggressive are your existing workers in asking for a raises, promos, etc? what do people take as a "given" and what do they think is a reach for them? These things operate as a sort of piggy bank. Every time you outbid a startup for promising talent, you are drawing from the piggy bank; that person tells their friends, makes a post on linkedin about it, which causes subsequent outbiddings to cost, pound for pound, ever so slightly more. When the piggy bank is empty, you refill it again by traumatizing everyone with a big, industry-wide layoff. But: you can only do this if you have a big hammer to wield.
As a bonus, if you can be a little bit discerning in your firings, you actually can shed dead weight in the process.