I know the general push for smaller teams - e.g. the Two Pizza Rule or the 7 +/- 2 Rule, but until now I assumed this was only to minimize communication paths within the team. Turns out there is another effect at play: The Ringelmann Effect:

The Ringelmann effect is the tendency for individual members of a group to become increasingly less productive as the size of their group increases. […] As more people are involved in a task, their average performance decreases, each participant tending to feel that their own effort is not critical.