The news also mentioned keeping about 25 employees as a "skeleton crew" in order to finish up certain projects. Hopefully The Walking Dead is one of those projects.
It's being said that Walking Dead is canceled, but that's something official quite yet.
I have to wonder if the formula Telltale cemented with Walking Dead is what maybe lead to this in the long run. To me and from reviews I read, the games were all generally the same, the same type of release schedule, same bugs and looks a lot of the time, just with a different story. Not much in the way of progression and overall improvement in the games or genre itself. I really liked Walking Dead Season 1, but after that, I thought those games didn't hit the same emotional impact, while also not being any different to play and I never found a lot of interest in Wolf Among Us and Tales from the Borderlands and never made it past their first episodes.
Combine elements like that with their episodic release schedule, which does push people towards buying the game day one, but instead to wait for release, wait to hear how good it may be, and then most likely just wait on a sale...something like that could be a factor, especially when dealing with big licenses like they had. We won't know for a while till the smoke clears and people start talking about what went down, but it would be interesting to see if this was a factor or if the company was just mismanaged. Looking at a lawsuit that showed up this year from a former CEO and co-founder seems to lend some credence to that.