but a few smart and qualified engineers decided to quit and look for other opportunities.

This reminded me of a decision a company here made at the GFC. They decided to fire a lot of people and then hire them back through a fresh interview process. Two of the people are highly specialized and there is pretty much no one in the country that can do their job - let alone with years of experience under the belt. They knew their worth, they knew the conditions, they went out and started their own business. Five days later, the company called them and said, "btw, good news, you guys can come back to work without the interview!"

No thanks.

They are now contractors earning magnitudes more than they were, doing exactly what they were doing before, often sitting at the same desks they had before, when they aren't doing work for competitors too.