I'm very confused about this. Salary is only one portion of your total compensation. The vast majority of tech companies offer equity in a company. The two ways to increase the FMV of your equity is: increase your equity stake or increase the value of the total equity available. Hitting the same goals with fewer people means your run rate is lower, which increases the value of your equity (the FMV prices in lower COGS for the same revenue.) Also, keeping on staff often means you want to offer them increased equity stakes as an employment package. Letting staff go means more of that available equity pool is available to distribute to remaining employees.
We aren't fungible workers in a low skill industry. And if you find yourself working in a tech company without equity: just don't, leave. Either find a new tech company or do something else altogether.
Equity is negotiable just like salary, and if supply of developer labor increases with the same or less demand, you'll get less equity just like you will get less salary.
I can't believe the person you replied to thinks that they're going to get some magical more amount of equity because you can hopefully do more with fewer people. That's assuming the entire business landscape doesn't also change with AI, disincentivizing so much investment in companies in the first place because someone else with AI can create a competitor in a shorter amount of time...
In the last three startups I worked at I didn’t bother exercising my vested equity - even a successful exit would at best triple the price of those shares - not worth the risk. One of those three startups already failed.
We aren't fungible workers in a low skill industry. And if you find yourself working in a tech company without equity: just don't, leave. Either find a new tech company or do something else altogether.