Some people have had their choices severely constrained by circumstances. A categorical 'I won't hire from company 'x'' without any willingness to look at circumstances is silly.
Another thing the guy overlooks: these people could simply be extremely loyal and may hope that given Y!'s scale that there is a chance that the right management team could make things work. Other companies have been in bad shape and have survived eventually.
Loyalty is an excellent quality and penalizing it is stupid. You really shouldn't hire based on where people used to work, you should hire based on your needs, team fit and skills.
Another thing the guy overlooks: these people could simply be extremely loyal and may hope that given Y!'s scale that there is a chance that the right management team could make things work. Other companies have been in bad shape and have survived eventually.
Loyalty is an excellent quality and penalizing it is stupid. You really shouldn't hire based on where people used to work, you should hire based on your needs, team fit and skills.