This has been reported all over the place but for posterity here it is:

It has been learned through public and private sources that AOL has cut or will cut the remaining team working on Mozilla in a mass firing and are dismantling what was left of Netscape (they’ve even pulled the logos off the buildings). Some will remain working on Mozilla during the transition, and will move to other jobs within AOL.

The good news, however, is that the Mozilla Foundation has been set-up to foster continued development on the open source Mozilla (aka Firebird) browser. If promised money comes through it should have a nice endowment from the get-go.