You're not hiring more middle managers because you want too, no large companies have to promote engineers to senior engineering managers to handle the complexities of approvals required by compliance such as SOC2,SOC3,ISO27001,FedRAMP, GDPR, etc.

I've worked at companies were every line of code has to be reviewed and approved by a lawyer. Yes a lawyer (usually a former engineer that the company paid to go to law school) is reviewing some dumb little javascript or python script for license and legal compliance.