Which is more resilient? 20 Devs with Local AI vs. Downsizing to 8 Devs with Cloud AI?

Hi everyone, I’m looking for some critical feedback on a strategy comparison.

Instead of laying off 12 developers and keeping only 8 high-performing devs equipped with top-tier GenAI (like Claude or codex), I’m proposing an alternative:

Keep all 20 developers, but equip them with MacBook Pro M-series laptops running Local GenAI (Gemma, Kimi, etc.) for boilerplate and coding assistance.

I have two reasons : AI should only be an assistant. We need humans to provide the reasoning, edge-case analysis, and ownership that AI can’t fully replicate yet and two is if 5 of your 8 devs get sick or quit, the system crashes. With 20 devs, the "knowledge" is distributed, making the company more stable.

What are your thoughts?