We never had large design teams at NeXT nor later at Apple. That team was post iPod/iPhone/iPad introduction years when Steve was becoming more ill.Apple has now fully moved into the post-Jobs era.
Design is not an operations activity. It's a strategic asset. It's product planning beyond what the finance forecasters are comfortable seeing. Product roadmaps. Looking to where technology is headed, and designing solutions before we get there.
This is really terrible news for Apple. They will be relegated to "follower" status and no longer leaders. Having no vision means you're blind to opportunity.
They created the SVP role to keep Ives around. The team that does the work will now report more directly with Engineering as it used to do.