Q:

Becuase of the better performance of Magento 2, Can we reduce number of servers? 

Currently we are using 7 servers for our Magento 1 production site, those are all working under load balancer. 
Now we are planning on Magento 2 upgrade with php7.  Because of the php7 and magento 2 better performance compare to php 5.5 and magento 1, 
Is it advisable to reduce the servers to 5?  Will we get the same results of the existing system? 

A:

UPDATE: I benchmarked Magento 1.9.3.2 vs 2.1.4 myself.  1.9.3.2 beats 2.1.4 on every front. 

details here https://www.goivvy.com/blog/magento-1924-magento-214-performance-benchmark
OLD:
probably not.  always test test test before you make radical changes. 
you are right about one thing - php7 will get things faster. 
who told you magento 1.x performance is worse than magento 2.x?  having FPC built-in doesn't make magento 2.x better than magento 1.x in terms of performance. 
here go and read the benchmark tests https://blog.amasty.com/magento-1-vs-magento-2-performance-comparison-speed-test-results/
the final picture thanks to Amasty team (less is better):

another good source for your consideration https://www.magecore.com/blog/news/magento-ce-1-9-vs-magento-ce-2-0-performance-comparison
Also see this guide on how to speed up magento 2.