Without PhD students and postdoctoral researchers an academic would have virtually no research output. Science PhD's are basically doing the research that the supervisor would like to do themselves, so with groups of about 20 people it would be impossible for them to do it alone. Also, without PhD's there would be no research grants, and with the drop in research output the Universities reputation would akin to a college and not a University. I think it may be somewhat different in the humanities?