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richardhutnik said:

Isn't Valve supposed to me a top performer, doing real well with Steam and whatnot?  What the heck does it mean if they are laying off a number of people?

http://www.vgchartz.com/article/250749/report-up-to-25-laid-off-at-valve/

Has nothing to do with Valve struggling.  Like, at all.  They're one of the most profitable companies in the world.  A couple of years ago they were making more money per employee than either Apple or Google and I doubt a lot has changed.

This was almost certainly because they were moving away from certain projects and no longer needed certain employees.  Since most of those released were on hardware projects, a lot of speculation is that some of those roles will be filled by outsourcing to hardware dedicated companies.  I think Gabe has also spoken in the past about keeping staff quality exceedingly high.  Supposedly he said during a recent speech that, because of Valve's management structure, they needed to be aggressive about firing people.  

Long story short, they probably just didn't need them anymore.