"As webOS continues the transition from making mobile devices to open source software, it no longer needs many of the engineering and other related positions that it required before. This creates a smaller and more nimble team that is well-equipped to deliver an open source webOS and sustain HP's commitment to the software over the long term."
Many of the positions that have been cut were focused on hardware. That goes against the declaration in December that HP is still interested in making webOS tablets and phones. It's also unclear how the move affects the intended release of Open webOS 1.0 in September. Looks like we'll have to wait and see.
Update: A spokesperson from HP has issued the following statement regarding the future of webOS: "HP remains committed to the previously announced open source roadmap and will continue to provide updates on its progress. HP will explore the viability of putting webOS on devices, just as it does for other leading operating systems."