If the country had 100 people making gadgets, and now it only requires 50 to make the same number of gadgets, the country can now double the amount of gadgets it makes, or the 50 people can go make something else.
Therefore, a doubling in productivity will not decrease GDP (total production of an economy), but increase it.
This vicious circle has to stop, or the planet will stop it for us. We should think about how to work less and consume less.
The alternative demand constrained world with excess supply would look very different
Create an economy where the vast majority are unable to consume very much while aggressively expanding productivity and you'll create an economy with a demand shortfall.
Alternatively, imagine that someone makes a universal bot-slave that provides for all of your needs, manufacturing as necessary from raw inputs. It just buys the natural resources for pennies and makes them for you. The only inter-human commerce is for the natural resources (delegated through the bot-slave).
In that case, almost none of the production shows up in GDP accounting (because the bot just makes it and gives it to you), yet people are much better off.