They shave their entire body so they can move through the water faster.
-Lack of hair has nothing to do with speed for swimmers (or very little). When you shave your body, you are not only removing hair, but the layer of dead skin cells on the top of your skin as well. The idea is to remove all of the gunk and buildup on your skin so that when you enter the water, it feels different. Basically, all of the stimulation gives your body a shot of endorphins when you dive into the pool (kind of like steroids, without the drugs). That is why people swim faster after just shaving.
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Yes, when you shave (with a razor not electrical) it takes the first layer of skin off your legs, arms, or face and will take the drag off your body and will able you to slide through the water easier. But it will only work if you dont shave atleast 3 months and then shave it all off before a big meet.
Many male swimmers shave their legs, armpits and chest hair to glide faster through the water.