This was expected and is fully deserved after they delivered a puke called "CoH3". I do feel bad for the people who were let go, but let's be honest - CoH3 is a disappointment at almost every level, from its strategic direction to little things like attention to detail. They messed it up in pretty much every department, so the collective guilt is very relevant in this case and so the layoffs are logical. SEGA had to clean the house.
What does it mean for COH3? We will see, but it cannot be good. I see some people in this thread have already started taking copium, but the reality is - COH3 is not a good game to begin with. I am not sure it can be saved, but if it can be saved, it needs MORE developers to work on it, not LESS. What is going to happen to it now, that Relic has been downsized? I don't think it will be abandoned tomorrow, but the fact that this topic is brought up after only 3 months after release says a lot.
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