Comment by AdamN

It's worth noting that if each developer is 20% more productive with AI (let's take that as a premise and not dispute it), then it makes sense to go even further and reduce human headcount by more since the communication overhead of having 25% fewer developers is in and of itself a force multiplier.

tldr; 10 developers with 20% more 'productivity' can be replaced by 7.5 ideal developers and more like 6 or 7 developers due to the benefits of simply requiring less organizational communication.

I still think the ideal team size is unchanged however and that's 7-10 people. Note that teams aren't necessarily the same as direct reports. A CEO for instance has a certain number of reports and a leadership 'team' but they're not a team in the traditional sense since they are more about making good decisions and collaborating on specific things but mostly about leading their own orgs that have vastly different skillsets from eachother.