Yes, I've seen this numerous times as well. I call it "vanity hiring". "My department needs 12 new headcount because the other department is getting 10".

The sad thing is that you often have to play the game defensively -- I've seen semi-decent organizations end up consumed by the 80% overweight departments because bigger departments end up with all the advantages just as a function of their size, even if they're almost completely worthless. Have to keep pace with the useless hiring just so they can't say "well it's our smallest group, only 5 guys", etc.