While these news are kinda sad and definitely point to CoH3 not performing as expected, let's not pretend like this means that CoH3 is doomed for sure... not even close if you ask me.
We have absolutely no clue who got fired here, they could be (and probably are) people who -as shitty as it sounds- are not deemed essential anymore for the future development of the game.. such as Campaign mission designers or certain artists.... or people who are not even in the CoH3 team to begin with.
Even when putting the performance of CoH3 and this rough economic situation aside, Relic is not working on any projects right now apart from CoH3, at least not that we know of. They had over 300 employees prior to this move.... and I really doubt you need that big of a staff to support a post-launch game. So it's absolutely no surprise that they laid off employees, the total number is just a bit surprisingly high now. It's not unusual at all that the employee number of game development companies goes significantly up and down as time passes and games getting launched. No matter if it's Relic or Rockstar Games or any other studio
People really need to stop jumping to worst-case scenario conclusions all the time... the future of CoH3 might as well be very positive despite this news for all we know. Relic still has around 200 employees left
Yes, the studio was surely bloated. Yet, kicking out a third/quarter (whatever the number of Relic employees currently is) of your employees is never a good sign. Judging by the game's problems, features and Relic's communication, a lot is mismanagement of the studio, which means Relic would need to exchange at least leading positions in the company. This is speculation of course, but I think a somewhat founded one. But kicking out 121 people is not kicking out the management. I guess those people save their ass and it is smaller staff that has to go, so the core issues will likely stay unresolved.
Relic wasn't able to get CoH3 ready for launch with their previous employees, they didn't get much done between the betas and launch, nor launch and today. Relic won't suddenly have a faster pace by downsizing significantly.
The mass layoff could be expected after finishing a game. You obviously need way less people to maintain and update content than to development from scratch. But coh3 is not done and Relic knows this. Yet, they have to kick out a huge part of their staff.
The most likely conclusion is that Relic was in financial trouble before, had to rush the release of CoH3 (or management ignored the state in order to cash in for their reports), the game got its deserved mixed reviews which is worse than what Relic would have needed. They then released the shop to rake in more revenue, which made the situation worse. Players were dropping and so did the economic expectations for coh3, at which point they made the odd survey and also the decision that the current size is unsustainable given the expected revenue from the game, so a huge part of the employees got fired.
Since I doubt that these people are the ones responsible for all of the failures, I don't see why things will improve from here. Development will go even slower than right now.
At the very very least, Relic teams will go through a huge restructuring process that will likely put output to zero for the next weeks. This coincides with the console release, and will also not help to rebuild the player base (unless the next patch is great, which I doubt given the preview).