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Yes, of course they do. It's a two-way street as well, reducing the humanity of the interviewers at the same time as it scars the interviewees. There's also a very bad feedback effect that's driving those who don't do well in such an environment out of the profession (or at least an entire job class) and reinforces their inevitability as the chosen way from those who do.

I so notice the difference in interviewing from when I entered the software profession til now. The code quality isn't any better even if various groups think they've purchased hiring infallibility at the cost of their souls.