Yes, they laid people off.

Please, can we stop having the end-of-the-world predictions? The gossip rag got the numbers wrong, and their SF employees are not their only employees - there are also a bunch in Russia. I suppose you can't call it off-shoring since SUP is based there, but they do appear to have tipped the balance in that direction.

In any case, while I feel very bad for everyone who lost their jobs in these layoffs, I don't think it means that LJ is going away. If you're worried about that, try one of the backup options (export your journal is an option from LJ itself; LJ archive; LJ Book). Sorry, I don't have links handy. Check out http://news.livejournal.com/112309.html?page=9#comments if you want to, it should link to some of them - the news post has nothing to do with this, it was just the most recent and people are freaking out on it.

Links, for anyone who's curious or who hasn't yet heard the rumor that the sky is falling:
http://news.cnet.com/8301-13577_3-10132684-36.html
http://community.livejournal.com/no_lj_ads/83519.html
http://community.livejournal.com/permmembers/32086.html (links to the gossip article about the falling sky)