In the game, the amount of manpower one uses for the army is the exact number that's deployed in combat divisions. So if we try to go realistic and deploy 6 million men for the US Army (its historical figure), that would equal to roughly 600 divisions with average sized AI divisions. However combat units is only one part of a division's actual strength. The game completely disregards life support, logistical and administrative figures (also known as tooth-to-tail ratio). In reality, the divisional slice is what's used to determine the true size of a division. The US deployed a total lof 89 divisions in WW2, 64 of which was deployed in the ETO. In game terms this is a force of around 650,000 men. However the actual number is closer to 4,350,000 because the operational slice of a typical infantry division was around 67,900 (13,800 standard division size + 54,100 non-divisional slice size = 67,900 operational slice size*). The number goes higher or the frontline numbers go lower if we are talking about armoured and mechanised divisions, which need more support.
1- The divisions the AI deploys are too small, hence there are too many of them.
2- The game doesn't account for the fact that support, logistical and administrative structures comprise 60-80% of total deployed troops. Hence the majors never run into manpower issues, where in reality, lack of manpower crippled the likes of Germany and the Soviet Union.
Sources:
* The Other End Of The Spear: Tooth-to-Tail Ratio (T3R) In Modern Military Operations by John C. McGrath, Combat Studies Institute Press