There are several factors. First of all, what they are building is a HUGE engineered system which would have taken up a couple of buildings a decade or two ago. The fact that the end product is small doesn't change the complexity. The second part is the fact that it IS so small, which brings its own complications. In addition, semiconductor manufacturing is a very tricky business where even making the simplest thing (e.g., a transistor) takes an enormous amount of planning, characterization, and tool design.
Part of it is the R&D -- nothing like this has been done before, so certain things have to be figured out (heat dissipation, how the proximity of the components effect the other components,stuff neither of us will understand, etc. etc). Another huge part is tooling and process -- someone has to design, test and characterize the fabrication tools and processes (the "automation" you speak of has to be built by someone -- a device this complicated probably can't be built without the automation). The chip is divided into subsystems each of which needs to be designed, simulated, and optimized. Someone has to integrate all the subsystems and simulate them together. The 1000 people probably include material scientists, process engineers, electrical engineers of various stripes, semiconductor physicists, mechanical engineers (heat dissipation, packaging, etc)., systems engineers, engineering project managers, etc.