My boss was burned on this last year. There was someone in our department who literally did NOTHING but they were pals so she got away with it. The company ended up downsizing our department (not surprising since a product we supported was sold off). We all thought that the pal would get let go since she supported that product the most but she wasn't. Instead she was protected and the person that did all the work, for the product we still had, was let go instead. Literally 2 weeks after that happened the pal essentially ghosted the company and the person who was let go was begged to come back. It caused quite an issue in our department, and my boss lost her friend. (Sorry if that was hard to follow I'm being vague on purpose).
I personally try to be friends/friendly with people I lead and with my boss, but it does make it hard at work at times. Long story short, as others have said, you absolutely have to be able to separate work and personal. If you can't do that, I don't think it's a good idea.
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