Q: Is it required to slaughter an animal for Eid al-Adha or is it recommended?
The majority of scholars held that it is a highly recommended act to sacrifice an animal for Eid al-Adha. This means that they did not consider it to be required but rather high recommended. Imam Abu Hanifa was of the opinion that sacrificing on Eid al-Adha is required for those who are capable of doing so.
The majority based their opinion on a hadith of the Prophet (pbuh) wherein he said, "If the ten days of Dhul Hijjah begin and one of you wishes to sacrifice then they should not cut their hair or nails." The wording of this hadith indicates that the person has a choice as to whether or not they want to sacrifice. It is also narrated that Abu Bakr and Umar (ra) would not sacrifice in some years so that people would know that it is not required.
As to how many animals should be slaughtered then a sheep is enough for one person and a camel or cow is enough for seven people. The Shafi'is and Hanbalis held that one sacrifice is enough for an entire family. So if a family with a father, mother, and several dependent children was to slaughter one sheep then that would be enough for the whole family.
It is important to remember that the sacrifice of Eid al-Adha is a great tradition and an important act of worship in Islam. Therefore, the one is able to sacrifice should sacrifice even if they believe that it is recommended and not required.