7 direct reports is very normal for a manager. One thing to dig into is whether they think 7 direct reports is too many for you (as opposed to anyone) and they just don't want to say it directly. This could be because they think you are spending too much time on IC tasks (coding) and won't be able to handle that many, you're too junior (recently started managing), or there are other issues going on with you or the other lead that your senior management hasn't been explicit about. You can do this constructively by asking more about what they'd be looking for to show that you could handle that scope and how to set goals/improve to get there.