An observation from my work experience is that, while things run efficiently with smaller teams overall, small teams also tend to make it easier for any given leader to have a reasonably good idea what's going on across their org (it's easier to grok a 50 person team's work when it's split into 10 mgr teams than if it were completely flat), but that also puts the lower level managers' jobs at risk because their director is more likely not to consider them essential -- ironically, because things are running smoothly.