I agree these cuts would mostly come from customer support, but don't take this as a sign that WoW is dying. WoW is not dying. Keep in mind, back in 2004-2006, Blizzard was trying to keep up with the explosive growth and demands of WoW. Hiring was at a fever pitch. I remember the worldwide launch of Burning Crusade and being impressed with the number of people and resources being put into the effort. Good times.
Now, with more experience with the process and with subscriber numbers plateauing, Blizzard has a better plan for managing their growth, so the need for so many CS people is simply not so great anymore. Although I do wonder at the timing, as I agree that Diablo 3's launch will bring its own frenzy of issues, especially with the RMAH.
In any case, I feel for any of the employees let go, since it seems like working at Blizzard would be a dream job(if I could just get that job in the cinematics dept!).