Precedent of country (or large institution) that did teaching reform: reducing number of tutors while increasing salaries for the rest I am looking for a Precedent of a country that would have done a teaching reform: From many tutors with minimal (or low) salaries to a fewer teachers with bigger salaries and how did it work out...

I was a bit reluctant inquiring here, so have asked this on meta and it seems this question does not break any rules as long as we are talking about universities.
Your scenario is to a large extent ongoing in Russia now. In May 2012 &quot;newly re-elected&quot; president Putin signed a number of bills for the Government to implement in 2012-2021. In particular, Bill 597 says that ...

by 2012 average salaries of teachers should reach the average level in corresponding regions
by 2018 average salaries of teachers should reach 200% of the average level in corresponding regions

The implementation and the effect of this bill is rather controvertial. It seems that the required government funding for the educational sector was not increased appropriately.  To comply with the request, many schools and HE institutions had to reduce the number of posts significantly to report the required increase in average salaries. In practice, many tutors were pushed on 0.5FTE contracts (or less) with increased FTE salary levels, ending up with the same take-home salaries and sometimes higher teaching load. The overall effect on the sector is hard to see at the moment, since it is obscured by other ongoing reforms and political changes.