Staff reductions is pretty common after a game is released...

From 10 years ago?  Considering there is anywhwere from 130-150 employees and i dont hear about them firing people on a regular basis, my guess is about 80 of those employees are still there.

http://www.giantbomb.com/viva-pinata-trouble-in-paradise/3030-20682/credits/

http://www.mobygames.com/game/xbox360/kinect-sports/credits

less than a dozen people on viva were on sports.

And two of them were just laid off.

If im looking at things correctly there iwas only 37 people working on Viva Pinata: TiP?  Again, 130+ at Rare + freelancers thatr they hire for pretty much every game. 

Obviously there is an addition of new employees at rare and employees that has been there for years.  That goes for any studio.  New people get hired and some people retire.  Some leaves, some comes.

But when EA cuts staff on a studio that's not producing profits, they're just buying and killing studios.  Exactly.

I don't think Microsoft knows what to do with Rare anymore. Back when they were making standard games they were largely producing sales flops. At least with Kinect they found some success for a while. But that's gone too. Maybe Microsoft will have them designing games for Windows Phones? I really don't know what's going to happen with the studio.

I agree that it is a business, but I also look at how a business wants to be PERCEIVED.  M$ is trying to sell a certain perception right now.  IF M$ was a little smarter, they would ate the cost of those employees for another 60 days to get past E3.  They could later do it and gain some positive press by calling it a reorg to support a particuler title.  Instead, they just dumped some people right after anouncing that the new XB1 without Kinect (calling it a consumer choice option).  So the perception would be less support of Kinect, even though they are suggesting otherwise.

Business is just as much about perception than it is about anything else.

Not true ether.  Perfect Dark Zero sold 1.5m, Kameo sold 1m, and Viva Pinatas sold 2m.  Announced by rare a long time ago.  VGC has them undertracked majorly

None of those are strong sales. Especially since Kameo and Perfect Dark were exclusive launch titles, usually that gives higher than average sales.