Pretty much like every other Christmas for the past 10(?) years, WotC has fired some people. This time it was Rich Baker and Steve Winters who were "let go".
Now, before anyone jumps the gun, no, WotC isn't doing badly. As I said, they've been doing this for years and they've been also hiring people recently (most notably - and to a lot of internet chagrin - Monte Cook).
Much as Zak pointed out sometime ago, writing for a company simply doesn't pay as much as independent publishing. This has been one of the major ideological pushes behind TheForge, as well. In the RPGnet thread where I got this bit of news from, Holden explains that the layoffs are normal in other companies, too. The standard practice seems to be to subsequently rehire these people back as freelancers (frex Ethan Skemp, apparently fired from WW is now leading the Werewolf20 project for the same WW).
So you see where this is going. The industry isn't big enough to have more than a certain number of people hired full-time. Never was. The big RPG company model is unsustainable beyond a certain size. They fire you then hire you to work freelance for less money (and fill your vacancy with someone else). In most cases, people would be better off publishing their own stuff, but D&D isn't owned by any one person anymore. And since there isn't an OGL for 4th edition it can only continue as a company product, as a brand. But it can't be successful beyond a certain point, because the market is too small. Companies like WotC, Paizo and WW are somewhere in the twilight zone between a good, growing business, and sustainable author-owned self-publishing. We'll see what this will mean for the future of the games that these companies produce.
White Wolf basically had to go into hibernation some time ago and is now slowly coming back with legacy products and POD books, but their products always targeted a certain (if rather large) sub-niche of an already niche market so this looks more of a low-investment, zero-sum dedication of keeping the line going, rather than flourishing. Pathfinder was an amazing success, but it's questionable how long that streak will run undisturbed. I believe games of this type have a certain life expectancy, as evidenced by D&D itself. WotC is still doing very well but you can see that they've been trying to catch their footing for a while now, coming to terms with changes in the market, economy and technology.
The thing is, this is a hobby. In most hobbies, companies sell you the materials, the tools, the bits and pieces for you to work with. In the RPG hobby, the industry has been largely established on selling end products. This is because once they sell you the rules (once!), you don't really need to buy anything else from them. So the company has only two choices after a while - either they keep bringing in new players over and over, so the core books keep selling or make a new version of the rules to make everyone buy them all over again.
The period in between is filled with settings, fluff, splatbooks and similar products that aren't really hobby-material most of the time, but end products, consumer products. TSR and WotC have been selling us Forgotten Realms over and over for many years now. But guess what, Forgotten Realms are the result of someone's home game. It's kinda like selling you an already built and glued-together LEGO castle as an example of what you could build with the bricks.
I've gone on a massive tangent, but the point is: the RPG hobby is extremely vibrant. But the RPG industry cannot and probably never will be able to make more than a certain amount of money. So they need to cycle employees without growning and sell us things we could have built ourselves.
I don't blame them, I believe they do the best they can. It was never supposed to be a real "industry", it can't be. But if we want to keep buying games like D&D (which has gone far beyond the limits of self-publishing), that's probably the only way it can work. For now at least.