Blizzard boss Mike Morhaime also posted a message to the community on the World of Warcraft forums about the announcement.
After evaluating our current organizational needs, we determined that while some areas of our business had been operating at the right levels and could benefit from further growth, other areas had become overstaffed. As a result, we need to scale down some of our departments and part with some of our colleagues and friends here at Blizzard. I know that you all understand how difficult this type of situation can be for anyone who might be affected, so I want to assure you that we'll be offering each impacted employee a severance package and other benefits.
Blizzard still has a number of different projects in the works that include StarCraft II: Heart of the Swarm, Diablo III, the World of Warcraft expansion Mists of Pandaria and the secretive MMOG known currently as Titan. For now, it doesnt appear as though the publishing schedule for current projects will be affected.
As always, our best wishes go out to those that will be affected by the layoffs.