my hypergrowth hiring days are a few years behind me but fwiw I did read cover letters. Including one was an easy way to get to the top of my ATS pile. At the time, there was no AI generation so it was a decent signal someone actually wanted the job vs was just spamming. I was sifting through thousands of applicants for the few who would give a shit about our product and customers. That signal is no longer useful and you now have to use some AI countermeasures to cull the stack of applicants (or as you mention, ignore the stack and only interview referrals... 100% agreed that is the most effective way in).
